LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
For a policy owned by one spouse on the other spouse's life, with the children as beneficiaries, the roles are:
- AThe owner and the life insured are the same person, since spouses are treated as one for insurance purposes under the Act
- Owner: first spouse; life insured: second spouse; beneficiaries: children; a contingent owner should be named
- CThe life insured controls the policy, since the coverage is on that spouse's life
- DThe children own the policy, since they are the people who will receive the proceeds
Correct answer: B) Owner: first spouse; life insured: second spouse; beneficiaries: children; a contingent owner should be named
Mapping roles clarifies control and payout. Cross-ownership between spouses can serve estate and creditor purposes.
Why the other options are wrong
- AThey are different people here.
- CThe owner controls the policy; the life insured has no ownership rights here.
- DChildren are beneficiaries only.
Exam tip
Map owner/insured/beneficiary explicitly on every application.
Common mistake
Forgetting the contingent owner on a spouse-owned policy.
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.