LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
A client designated 'my wife Jane' years ago, later divorced and has now remarried. Unless the designation is changed:
- Jane remains the designated beneficiary because she was named by her own name
- Bthe new spouse takes the proceeds because she is the client's wife at the date of death
- Cthe proceeds fall into the estate, since the designation has become ambiguous
- Dthe insurer divides the proceeds equally between the former and the current spouse
Correct answer: A) Jane remains the designated beneficiary because she was named by her own name
A designation naming a person by name continues to point at that person regardless of the relationship changing. Divorce does not automatically revoke it in most common law provinces, so the designation must be reviewed.
Why the other options are wrong
- BThe words after the name do not redirect the proceeds to a later spouse.
- CNaming a specific individual leaves nothing ambiguous to resolve.
- DProceeds are not split between a former and a current spouse.
Exam tip
Review every designation after a divorce, remarriage or new relationship.
Common mistake
Assuming a divorce automatically cancels a former spouse's designation.
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.