LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
The 'life insured' is:
- AThe beneficiary, since the person whose life is covered is the one who benefits from the coverage
- BAlways the owner, since the Act does not permit one person to own insurance on another person's life under any circumstances
- The person whose life is covered; if not the owner, consent is generally required and no ownership rights arise
- DThe agent, who is named in the policy as the life insured for administrative purposes
Correct answer: C) The person whose life is covered; if not the owner, consent is generally required and no ownership rights arise
Third-party ownership (for example, a parent owning a policy on a child, a corporation on a key person) separates the life insured from the owner.
Why the other options are wrong
- AThe beneficiary receives; the life insured is the risk.
- BOwner and life insured can differ.
- DThe agent is never the life insured in that capacity.
Exam tip
Life insured ≠owner necessarily; consent replaces insurable interest.
Common mistake
Assuming the life insured can change the beneficiary.
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.