Who can be designated as a beneficiary in a life insurance policy?

In the context of life insurance policies, a beneficiary is the person or entity designated to receive the death benefit when the insured passes away. It's important to understand the various categories of individuals and entities that can or cannot be named as beneficiaries.

The correct answer identifies those expressly prohibited by law to receive donations as ineligible beneficiaries. This typically includes individuals who are under legal restraints, such as certain felons, or those who might already be in conflict regarding the entitlements to the insurance proceeds. The law often restricts the naming of someone as a beneficiary if they are unable to financially manage or are legally barred from receiving such funds, ensuring that the intended distribution of the insurance benefits aligns with legal standards.

On the other hand, while creditors might indeed be named as beneficiaries in some contexts, they typically do not have a vested interest in the insurance proceeds in the same way that individuals or entities who are designated to benefit from the policy do. Minors can be named as beneficiaries, but typically, an adult guardian would manage those benefits until the minor reaches the age of majority. Hence, options that include minors or creditors do not align with the restrictions laid out in existing laws regarding beneficiaries in life insurance policies.