LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
Under common-law provinces' rules, divorce:
- AMakes the children the beneficiaries automatically, since the Act substitutes them for a former spouse
- BAutomatically revokes a spouse's designation, so the proceeds go to the estate unless a new designation is made
- CVoids the policy, since the insurable interest that supported it no longer exists
- Does not by itself revoke a former spouse's designation; the owner must actively change it
Correct answer: D) Does not by itself revoke a former spouse's designation; the owner must actively change it
A frequent estate problem: the ex-spouse remains beneficiary because no change was filed.
Why the other options are wrong
- AThere is no automatic substitution.
- BRevocation is generally not automatic for policy designations.
- CThe policy continues.
Exam tip
Divorce ≠automatic revocation; update the designation.
Common mistake
Assuming the separation agreement alone changed the beneficiary.
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.