If a life assurance policy is held jointly, what legal assumption applies?

• A. Held as tenants in common
• B. Held solely by the first-named party
• C. Divided equally regardless of contributions
• D. Held as joint tenants

Answer: (D)

When a life assurance policy is held jointly, the legal assumption is that it is held as joint tenants. This means that all parties named on the policy share equal rights to the policy's benefits, and there is a right of survivorship involved. In the event that one policyholder passes away, their interest automatically transfers to the surviving policyholder(s), rather than being passed on according to the deceased’s will or state inheritance laws.

This structure promotes a seamless transition of benefits without the complexities of probate and facilitates the flow of funds directly to the surviving co-owners. Joint tenants typically share equal ownership percentages, and the policy cannot be unilaterally altered or terminated by one party without the consent of the other(s).

In contrast, being held as tenants in common implies that each party has distinct shares which can be transferred or inherited separately, and that there is no right of survivorship. Therefore, joint tenancy is the appropriate legal assumption for a jointly held life assurance policy.