Why cannot life insurance proceeds be directly paid to a minor child?

Life insurance proceeds cannot be directly paid to a minor child primarily because minors are unable to sign legal documents, including a release of claims. Since the probate or insurance process may require such a release to disburse the funds, the inability of a minor to sign these documents means that direct payment is not feasible. The law recognizes that minors lack the legal capacity to enter into contracts, which extends to receiving life insurance benefits directly.

In most situations, the insurance company will require that a designated adult, typically a guardian, manage the funds on behalf of the minor until they reach the age of majority. This process ensures that the proceeds are handled in a manner that's in the best interest of the child.