LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
A beneficiary designation made under a power of attorney by the attorney:
- AIs required whenever the owner loses capacity, so that the policy always has a current designation
- BMakes the attorney the beneficiary by operation of law, since the attorney stands in the owner's place
- Is generally not permitted, since designating a beneficiary is a personal act unless the POA or law allows it
- DIs always valid, since a power of attorney gives the attorney every right the owner has under the contract without exception
Correct answer: C) Is generally not permitted, since designating a beneficiary is a personal act unless the POA or law allows it
Attorneys manage property but cannot make gifts that take effect at death absent express authority.
Why the other options are wrong
- AAn attorney is never required to designate a beneficiary.
- BSelf-dealing would be a breach of the attorney's duty.
- DA beneficiary designation by an attorney is usually invalid.
Exam tip
Attorney under POA: no beneficiary designations (barring express authority).
Common mistake
Accepting a beneficiary change signed by an attorney.
What this tests
CISRO competency component 1.5 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.