What is meant by class beneficiary designations?

Class beneficiary designations refer to the practice of naming a group or category of individuals as beneficiaries instead of specifically naming each individual. This approach allows for equal distribution of benefits among members of that class, such as children or a defined group.

When a class designation is used, it ensures that benefits can be allocated fairly, either per capita (where each member of the group receives an equal share) or per stirpes (where benefits are distributed according to the familial line, allowing for descendants to inherit the share of a deceased member). This method provides clarity and helps simplify the distribution of benefits when dealing with larger families or groups.

In contrast, the other options pertain to different aspects of beneficiary designations. Designating beneficiaries as individuals rather than groups focuses on specific names; establishing a set order relates to how benefits are distributed among primary and contingent beneficiaries; and differentiating between primary and contingent beneficiaries involves mapping out the hierarchy of benefits without class designations.