LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The statutory provisions on 'designation of beneficiary' after lapse and reinstatement provide that:
- AReinstatement cancels all prior designations, so the owner must name the beneficiary again on the reinstatement form
- BThe insurer chooses the beneficiary on reinstatement, based on the designation it considers most recent
- CThe estate becomes the beneficiary on reinstatement, unless the owner files a new declaration within the grace period
- The original contract, including its designation, is restored; a new designation is needed only to change it
Correct answer: D) The original contract, including its designation, is restored; a new designation is needed only to change it
Reinstatement revives the same contract. Designations continue unless changed.
Why the other options are wrong
- ADesignations survive reinstatement.
- BThe insurer never chooses the beneficiary; the owner does.
- CThe estate takes only if originally designated.
Exam tip
Reinstatement = same contract, same beneficiary.
Common mistake
Assuming reinstatement requires re-designating beneficiaries.
What this tests
CISRO competency component 1.3 — 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
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