LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
If the sole named beneficiary predeceases the life insured and no contingent is named:
- AThe agent decides who receives the proceeds, based on knowledge of the client's wishes
- BThe insurer keeps the proceeds, since no one is entitled to claim them under the contract
- The proceeds go to the estate unless the designation or the Act provides otherwise
- DThe beneficiary's estate receives the proceeds, since the beneficiary's interest passed to their heirs at death
Correct answer: C) The proceeds go to the estate unless the designation or the Act provides otherwise
Lapsed designations default to the estate under the Act's rules.
Why the other options are wrong
- AThe agent never decides who receives proceeds.
- BThe insurer never keeps unclaimed proceeds.
- DA predeceased beneficiary's estate takes nothing.
Exam tip
Predeceased beneficiary, no contingent → estate.
Common mistake
Not updating designations after a beneficiary's death.
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.