LLQP Life Insurance · Component 3.2 · 25% of the exam
A client insists on naming her seven-year-old daughter as sole beneficiary. The agent should:
- Arefuse to proceed with the application at all until the client names an adult beneficiary
- Brecord the designation as instructed, since the client is entitled to choose
- Cname the client's estate so the executor can distribute the money later
- explain the trustee issue and recommend naming a trustee or a settlement option
Correct answer: D) explain the trustee issue and recommend naming a trustee or a settlement option
A minor cannot give a valid receipt, so proceeds may be paid into court and administered until the age of majority. Naming a trustee in the designation keeps control with someone the client chooses.
Why the other options are wrong
- ARefusing to proceed is unnecessary once a trustee is named.
- BThe client is entitled to choose but needs to know the consequence.
- CAn estate designation loses probate bypass and creditor protection.
Exam tip
Minor beneficiary equals trustee named in the designation.
Common mistake
Recording a minor beneficiary and moving on to the next question.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.