LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
An 'assignee' of a life insurance policy is:
- AA new beneficiary appointed by the owner to replace the original designation on the contract
- A person or institution to whom the owner has transferred rights, absolutely or as collateral, on written notice
- CThe agent, to whom the owner has assigned the servicing of the policy and its future premium collection
- DThe life insured, who receives the policy's rights when the owner dies before the life insured
Correct answer: B) A person or institution to whom the owner has transferred rights, absolutely or as collateral, on written notice
Assignments alter who holds rights. Collateral assignees rank ahead of beneficiaries to the extent of the debt.
Why the other options are wrong
- AAssignment transfers ownership rights, not the beneficiary role.
- CAgents are not assignees.
- DThe life insured is the risk, not an assignee.
Exam tip
Absolute assignment = new owner; collateral = lender's security; notify insurer.
Common mistake
Failing to file the assignment with the insurer.
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
- 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:
- The 'personal representative' (executor or administrator) of a deceased owner:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.