What does a class beneficiary designation typically refer to?

A class beneficiary designation is typically used to denote a specific group of individuals who are eligible to receive benefits from a life insurance policy or similar financial product. When referring to children of the insured, the phrase encompasses all biological and adopted children, making it a clear and comprehensive designation. This categorization allows for ease of identification, as it includes all living children under this designation without needing to individually name each one.

Using a class designation such as "children" can simplify the process for the insurer, especially in cases where circumstances might change, like the birth of a new child. This means that as long as the children meet the definition established in the policy, they would automatically become beneficiaries without requiring additional documentation or policy changes.

In contrast, the other options are more limited or specific. Designating a spouse may include only one person, which does not capture the broader scope intended by a "class." Similarly, designating all living relatives could create ambiguity concerning who would receive benefits, leading to potential disputes. Lastly, naming specific individuals involves a precise selection that must be managed actively, which is different from the inclusivity of a class designation.