LLQP Life Insurance · Component 1.2 · 35% of the exam
A client's existing policy shows a contingent policyholder. The purpose of that designation is:
- To take over ownership if the policyholder dies while the life insured is still alive, where the two are different people
- BTo receive the death benefit if the primary beneficiary has died before the life insured, in the same way as a contingent beneficiary
- CTo act as beneficiary of the policy's cash value while the life insured is alive, so the value passes outside the estate
- DTo pay the premiums if the policyholder can no longer afford them, keeping the policy in force for the life insured
Correct answer: A) To take over ownership if the policyholder dies while the life insured is still alive, where the two are different people
When the owner is not the insured (a parent owning a policy on a child, for example), the owner's death would otherwise pass the policy through the owner's estate. A contingent owner keeps control where the client intends.
Why the other options are wrong
- BThe beneficiary receives the death benefit, not the contingent owner.
- CContingent owner and beneficiary are different roles.
- DPremium payment is the owner's responsibility.
Exam tip
Whenever owner ≠ insured, name a contingent owner.
Common mistake
Confusing contingent owner with contingent beneficiary.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.