LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
A named beneficiary is convicted of criminally causing the insured's death. The proceeds will generally:
- Abe retained by the insurer, which is relieved of any obligation to pay the claim
- Bbe paid to him in any event, since the designation was validly made while the insured lived
- pass as if he had predeceased, to a contingent beneficiary or otherwise to the estate
- Dbe divided among the deceased's surviving relatives in shares set by the insurer
Correct answer: C) pass as if he had predeceased, to a contingent beneficiary or otherwise to the estate
Public policy prevents a person from benefiting from their own crime. The proceeds are treated as though that beneficiary had died first, so a contingent designation takes effect and the estate takes otherwise.
Why the other options are wrong
- AThe insurer's obligation to pay remains; only the recipient changes.
- BNo one may profit from having unlawfully caused the death.
- DAn insurer does not determine shares among relatives.
Exam tip
A beneficiary who causes the death is treated as having predeceased.
Common mistake
Assuming the insurer keeps the money when a beneficiary is disqualified.
What this tests
CISRO competency component 1.6 — 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.