LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
'Per stirpes' in a designation means:
- AThe estate takes the deceased beneficiary's share, since a lapsed share reverts to the owner's estate
- If a named beneficiary predeceases, that share passes to their descendants rather than to the survivors
- CThe insurer decides how the deceased beneficiary's share is divided, based on the family circumstances known to it at the time
- DEqual shares among the surviving beneficiaries only, since a deceased beneficiary's share lapses
Correct answer: B) If a named beneficiary predeceases, that share passes to their descendants rather than to the survivors
Per stirpes keeps a deceased child's branch in the distribution; the default statutory rule is survivors share.
Why the other options are wrong
- ANot with per stirpes wording.
- CThe insurer never decides how a share is distributed.
- DThat is the default without per stirpes.
Exam tip
Per stirpes: deceased beneficiary's share goes to their descendants.
Common mistake
Omitting per stirpes when the client wants grandchildren protected.
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.