LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
A 'simultaneous death' of the life insured and the beneficiary (common disaster) is resolved by:
- APaying the proceeds to the insurer's general account, since no living person is entitled to receive them
- BSplitting the proceeds equally between the two estates, since neither party can be shown to have survived
- CPaying the beneficiary's estate, since the beneficiary's interest vested at the moment of the common disaster and passes to their heirs
- The statutory presumption that the beneficiary predeceased, so proceeds go to contingents or the estate
Correct answer: D) The statutory presumption that the beneficiary predeceased, so proceeds go to contingents or the estate
Survivorship rules keep proceeds within the insured's intended line rather than the beneficiary's estate.
Why the other options are wrong
- AProceeds are never paid to the insurer itself.
- BSimultaneous death rules do not split the proceeds.
- CThe presumption favours the insured's line.
Exam tip
Common disaster: beneficiary presumed to die first → contingent/estate.
Common mistake
Failing to name contingent beneficiaries for spouses who travel together.
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.