LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A 'joint last-to-die' policy provision:
- Pays on the second death, commonly for estate tax funding; premiums may continue after the first death
- BPays at the first death, so the surviving spouse receives the proceeds to replace the deceased's income
- CCovers the couple's children as well, since the policy is intended to protect the whole family's inheritance from tax
- DTerminates at the first death, with the survivor entitled to buy new coverage without evidence
Correct answer: A) Pays on the second death, commonly for estate tax funding; premiums may continue after the first death
Last-to-die policies fund liabilities arising at the second death (registered plan tax, capital gains).
Why the other options are wrong
- BThat describes first-to-die.
- CA last-to-die policy covers two adult lives.
- DIt continues to the second death.
Exam tip
Last-to-die: pays at second death; check premium treatment after the first.
Common mistake
Assuming premiums stop automatically at the first death.
What this tests
CISRO competency component 1.4 — 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.