LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
The 'protected class' or 'family class' of beneficiaries for exemption from seizure in common-law provinces includes:
- AAnyone the owner designates, since every beneficiary designation removes the policy from the reach of creditors
- BBusiness partners of the life insured, since they have a pecuniary interest in the life that the law protects
- CClose friends of the life insured, provided the relationship is documented in the designation
- The spouse, child, grandchild or parent of the life insured, with the exact list varying by province
Correct answer: D) The spouse, child, grandchild or parent of the life insured, with the exact list varying by province
Family-class protection applies while the designation is in force. Irrevocable designation of anyone gives similar protection.
Why the other options are wrong
- AIt is limited to the family class or irrevocable designations.
- BBusiness partners are not in the protected family class.
- CFriends are not in the protected family class.
Exam tip
Family class: spouse, child, grandchild, parent of the life insured.
Common mistake
Assuming naming a sibling gives creditor protection.
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.