What does "Per Capita" mean in a life insurance policy?

In a life insurance policy, the term "Per Capita" means that only living named beneficiaries receive the policy proceeds. This approach ensures that if a beneficiary has passed away before the insured, their share of the benefit does not go to their heirs; instead, it is distributed among the surviving beneficiaries equally. This definition emphasizes the principle of ensuring that benefits are only shared among those who are alive at the time of the insured's death, reflecting a fair distribution that honors those who outlive the policyholder.

The incorrect options lean towards different methods of benefit distribution. The idea of dividing benefits equally among all living heirs does not capture the specifics of "Per Capita," as it implies a broader group. The notion of benefits being divided by the number of beneficiaries suggests an equal distribution irrespective of their living status, which is not aligned with "Per Capita." Lastly, basing payments on the age of beneficiaries doesn’t pertain to the distribution method at all and does not relate directly to how benefits are allocated among beneficiaries' survival status.