LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
A 'revocable' beneficiary designation means:
- The owner may change it at any time without consent; the beneficiary has only an expectancy
- BThe beneficiary owns the policy jointly with the applicant and may object to any change in its terms
- CIt cannot be changed once the policy has been issued, since the beneficiary's interest vests at issue
- DThe beneficiary must consent in writing to any change, assignment or surrender of the policy
Correct answer: A) The owner may change it at any time without consent; the beneficiary has only an expectancy
Revocable is the default form of designation: the owner retains full control and may change it at any time without notice to or consent from the beneficiary, whose interest is only an expectancy.
Why the other options are wrong
- BOwnership is separate from the beneficiary role.
- CRevocable means changeable.
- DRequiring consent describes an irrevocable designation.
Exam tip
Revocable = owner changes at will; beneficiary has an expectancy only.
Common mistake
Believing a revocable beneficiary has vested rights.
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
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