LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
If a beneficiary cannot be located after the life insured's death:
- The insurer holds the proceeds or pays into court while efforts are made; unclaimed property rules eventually apply
- BThe agent receives the proceeds in trust, since the agent is best placed to locate the beneficiary
- CThe insurer keeps the money after a reasonable search, since it has no one to pay
- DThe estate takes the proceeds immediately, since an absent beneficiary is treated as having predeceased the life insured
Correct answer: A) The insurer holds the proceeds or pays into court while efforts are made; unclaimed property rules eventually apply
Insurers must attempt to pay the proper beneficiary; agents assist with contact information.
Why the other options are wrong
- BThe agent never receives unclaimed proceeds.
- CThe insurer never keeps proceeds because a beneficiary is hard to find.
- DThe estate takes only if the rules so provide after the beneficiary cannot be found.
Exam tip
Keep beneficiary contact details current.
Common mistake
Not recording beneficiaries' contact information.
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.