LLQP Life Insurance · Component 1.2 · 35% of the exam
An agent reviewing an existing policy notes the beneficiary is the client's ex-spouse from a marriage that ended ten years ago. The agent should:
- Point out that in most common-law provinces divorce does not revoke a designation, and ask whether she wants to change it
- BCancel the policy and arrange a new one, since a policy naming a former spouse cannot be amended after divorce
- CDo nothing, since divorce automatically revokes the designation and the proceeds will go to the estate
- DChange the beneficiary to the current spouse himself, since the client's intention is obvious from the circumstances
Correct answer: A) Point out that in most common-law provinces divorce does not revoke a designation, and ask whether she wants to change it
In common-law provinces a revocable designation stands until the policyholder changes it; divorce does not revoke it automatically (the rules differ under Quebec's Civil Code). Reviewing designations against current wishes is a basic part of assessing existing coverage.
Why the other options are wrong
- BCancelling the policy would destroy coverage the client may need; the fix is a new designation.
- CIn common-law provinces divorce does not revoke a beneficiary designation.
- DOnly the policyholder can change the beneficiary.
Exam tip
Designations survive divorce in common-law provinces. Reviewing them after any family change is basic service.
Common mistake
Assuming a divorce decree automatically removed the former spouse as 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.