LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
A father wants to take out a policy on his thirty-year-old daughter's life without telling her. The agent must explain that:
- Athe relationship supplies insurable interest, so no further step is needed at all
- Bparental consent is sufficient for a child of any age under provincial insurance law
- the daughter must consent in writing to a policy on her life owned by another adult
- Dthe policy may be issued now and the daughter informed when the first claim arises
Correct answer: C) the daughter must consent in writing to a policy on her life owned by another adult
An adult life insured must consent in writing when someone else owns the policy. A contract made without that consent is invalid, whatever the family relationship between the parties.
Why the other options are wrong
- AInsurable interest and consent are two separate requirements.
- BParental consent applies to minors, not to an adult child.
- DA contract made without required consent is not cured by later notice.
Exam tip
Adult life insured plus another owner equals written consent, always.
Common mistake
Assuming a family relationship removes the consent requirement.
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.