LLQP Ethics & Professional Practice · Component 1.5 · 60% of the exam
Where several beneficiaries are named without shares specified:
- AThe insurer chooses how to divide the proceeds among them, based on their relationship to the life insured
- BThe estate takes all of the proceeds, since a designation without shares is treated as incomplete
- CThe eldest beneficiary takes all, since the Act applies the rules of intestate succession to designations
- They share equally, and if one predeceases, the survivors share unless the designation provides otherwise
Correct answer: D) They share equally, and if one predeceases, the survivors share unless the designation provides otherwise
Statutory default rules govern multiple beneficiaries; explicit shares and per stirpes wording avoid disputes.
Why the other options are wrong
- AThe insurer never chooses among beneficiaries.
- BThe estate takes only if all predecease.
- CCo-beneficiaries share equally; the eldest has no priority.
Exam tip
Multiple beneficiaries: equal shares; survivors take a deceased's share unless stated.
Common mistake
Not specifying per stirpes when the client wants grandchildren to inherit a deceased child's share.
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.