LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
A client in a long-term common-law relationship wants his partner to own a policy on his life. The agent should confirm that:
- Athe partner may own it only after the relationship has lasted at least ten years
- the partner may own it, with the client's written consent as the life insured
- Ca common-law partner has no standing and cannot own a policy on the client's life
- Downership requires the couple to marry before the insurer will issue the contract
Correct answer: B) the partner may own it, with the client's written consent as the life insured
A common-law partner has the financial interest required at inception, and the life insured's written consent completes the requirements. The definition of spouse for other purposes varies, which is worth checking separately.
Why the other options are wrong
- ANo minimum duration is imposed for ownership by a partner.
- CA cohabiting partner clearly has an interest in the client's continued life.
- DMarriage is not a condition of owning a policy on a partner's life.
Exam tip
Financial interest plus written consent is what matters, not marital status.
Common mistake
Assuming only a married spouse may own a policy on a partner's life.
What this tests
CISRO competency component 1.2 — 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.