LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
A client wants to name her brother, who lives overseas, as beneficiary. The agent should explain that:
- the designation is valid, though identification and payment abroad may take longer
- Bthe proceeds must be paid into the estate and remitted by the executor instead
- Cthe designation is invalid because beneficiaries must be resident in Canada
- Dthe insurer will convert the proceeds into the beneficiary's local currency automatically
Correct answer: A) the designation is valid, though identification and payment abroad may take longer
Residency is not a condition of being named. The insurer will still need satisfactory identification, and payment arrangements across borders can add weeks, so the client should record full contact details.
Why the other options are wrong
- BA valid designation is not redirected through the estate.
- CA beneficiary may live anywhere; residency is not required.
- DCurrency and payment arrangements are not automatic and should be confirmed.
Exam tip
Foreign beneficiaries are valid; record full details to speed the claim.
Common mistake
Telling a client that only Canadian residents may be named.
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.