LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
A policy owner names her estate as beneficiary. On her death the proceeds will be:
- Apaid to whichever person produces the policy document to the insurer first
- paid to the personal representative and distributed under the will, after probate
- Cpaid directly to her children as the persons closest to her in law
- Dheld by the insurer until every named relative has agreed on the division
Correct answer: B) paid to the personal representative and distributed under the will, after probate
An estate designation makes the proceeds part of the estate, so the executor collects them and distributes under the will. Probate fees, creditor claims and the delay of estate administration all apply.
Why the other options are wrong
- APossession of the policy document confers no entitlement.
- CChildren take under the will, not directly from the insurer.
- DThe executor administers the estate; relatives do not negotiate the division.
Exam tip
Estate as beneficiary equals probate, creditors and delay.
Common mistake
Recording an estate designation without explaining what the client gives up.
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.