LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
The parties and persons involved in a life insurance contract are:
- The insurer, the policyowner, the life insured and the beneficiary; one person may fill several roles
- BThe agent and the insurer only, since the agent contracts on the client's behalf and holds the rights
- CThe government and the insurer, since the Insurance Act makes the province a party to every contract
- DOnly the insurer and the beneficiary, since the beneficiary is the person entitled to enforce the contract when a claim arises
Correct answer: A) The insurer, the policyowner, the life insured and the beneficiary; one person may fill several roles
Distinguishing owner, life insured and beneficiary is fundamental to rights, tax and estate outcomes. The agent is not a party to the contract.
Why the other options are wrong
- BThe agent is not a party.
- CGovernment is not a party.
- DThe owner is the contracting party.
Exam tip
Owner (rights), life insured (risk), beneficiary (proceeds), insurer (obligor).
Common mistake
Confusing the life insured with the policyowner.
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.