LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
An owner wants to change a beneficiary but the existing beneficiary is irrevocable and refuses consent. The result is:
- AThe owner can change it anyway, since ownership rights prevail over any beneficiary's interest
- The change cannot be made; the vested interest prevails unless the beneficiary consents or a court intervenes
- CThe policy is cancelled, since the owner and beneficiary can no longer agree on its terms
- DThe insurer decides whether the change is reasonable and records it if the owner's reasons are sound and documented
Correct answer: B) The change cannot be made; the vested interest prevails unless the beneficiary consents or a court intervenes
This scenario shows why irrevocable designations must be explained before use.
Why the other options are wrong
- AThe irrevocable beneficiary's consent is required for any change.
- CThe policy continues.
- DThe insurer follows the law, not its own judgment.
Exam tip
Irrevocable beneficiary refusing consent = no change.
Common mistake
Promising a client an irrevocable designation can be undone easily.
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
Timed sets weighted like the exam, and review of every question you miss. Free to start.