LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
A claim under a segregated fund contract on the annuitant's death requires:
- AA court order confirming the beneficiary's entitlement, since the insurer cannot judge between possible claimants
- BProbate in every case, since a segregated fund is an investment that forms part of the deceased's estate
- CThe agent's authorization of the payment, since the agent holds the client's file and knows the designation
- Proof of death, the claim form and identification; the death benefit is paid directly to the named beneficiary
Correct answer: D) Proof of death, the claim form and identification; the death benefit is paid directly to the named beneficiary
Seg fund death claims follow life insurance claim rules with the added guarantee calculation.
Why the other options are wrong
- AA court order is needed only when entitlement is disputed.
- BProbate is not needed for named beneficiaries.
- CThe agent never authorizes a claim payment.
Exam tip
Seg fund death claim: proof + form + ID → greater of market value and guarantee.
Common mistake
Assuming the death benefit is valued at the date of death rather than the contract's valuation date.
What this tests
CISRO competency component 1.6 — 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.