Which statement about beneficiary designations is NOT true?

The statement indicating that the beneficiary must have insurable interest in the insured is not true because, in most cases, beneficiaries of life insurance policies do not need to have an insurable interest in the insured. The primary requirement for a beneficiary is to be designated by the policyowner, and this can include individuals such as family members, friends, or even entities like charities, who may not have a direct insurable interest in the life of the insured. This flexibility allows policyowners to choose any individuals or entities they wish to receive the proceeds of the policy, regardless of whether those beneficiaries stand to suffer a financial loss from the insured's death.

In contrast, the other statements accurately reflect the principles of beneficiary designations. Beneficiary designations can indeed be made without an insurable interest requirement, and policies are still valid even if a beneficiary is not named, allowing the death benefit to go to the estate. Furthermore, trusts are often used as beneficiaries to ensure proper management of life insurance proceeds, especially for minors, demonstrating the versatility in how policyholders can arrange for the distribution of their insurance proceeds.