Which statement about beneficiaries in life insurance is true?

A beneficiary is indeed the person or entity designated to receive the benefits from a life insurance policy upon the death of the insured. This is a fundamental aspect of life insurance, as it establishes who will receive the death benefit, which can be crucial for financial planning and ensuring that the proceeds go to the intended recipients.

Designating a beneficiary is a key part of the policy application process, and policyholders have the flexibility to choose anyone they prefer as their beneficiary, which can include family members, friends, or even organizations. This broadens the options available for policyholders to meet their specific financial intentions upon their passing.

The other statements introduce inaccuracies regarding the requirements and flexibility surrounding beneficiaries in life insurance policies. For instance, a beneficiary does not have to be a family member, and many choose friends or charitable organizations instead. Additionally, beneficiaries must be named on the policy, as this designation is essential for the proper disbursement of the benefits. Furthermore, changing a beneficiary can typically be done at any time during the policy's duration, not just at the end of the policy term. This allows policyholders to adapt their beneficiary designations as their personal circumstances change.