What constitutes "dependency" in relation to life insurance beneficiaries?

Dependency in the context of life insurance beneficiaries refers to a situation where beneficiaries rely on the insured for financial support. This reliance can manifest in various forms, such as a spouse who depends on the income of the insured partner to maintain their household or children who rely on their parent for essential needs like food, clothing, and education.

Understanding this concept is crucial because life insurance is often designed to provide financial security for those who depend on the insured's income or support. The purpose of designating beneficiaries who are dependent is to ensure that they are financially protected in the event of the insured's death.

The other options do not accurately reflect the definition of dependency. Being financially independent from the insured contradicts the idea of dependence, as it implies no need for financial support. Beneficiaries living outside the state is irrelevant to the concept of dependency since location does not determine the financial relationship. Lastly, being under 18 years of age does not inherently imply dependency, as their financial need is dependent on whether they rely on the insured for support, not merely their age.