LLQP Life Insurance · Component 3.2 · 25% of the exam
A client's recommendation includes a life policy whose beneficiary will be a testamentary trust for minor children. The agent should coordinate with:
- AThe children themselves, since they are the beneficiaries of the trust and should understand how it will operate after the client's death
- The client's lawyer, so the trust's terms, the trustee and the designation wording align
- CNo one, since a trust designation is a standard form the insurer provides and the agent can complete it with the client
- DThe insurer's marketing department, which can provide sample designation wording for a testamentary trust
Correct answer: B) The client's lawyer, so the trust's terms, the trustee and the designation wording align
Trust designations require precise wording and a trust that actually exists or is created by the will. Coordinating with the lawyer prevents proceeds ending up in a court-administered account or in the wrong hands.
Why the other options are wrong
- AMinors cannot direct their own inheritance.
- CTrust designations need legal input.
- DMarketing has no role.
Exam tip
Trusts for minors: coordinate the designation wording with the lawyer drafting the will.
Common mistake
Naming 'my children' without a trustee or trust.
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.