LLQP Life Insurance · Component 4.2 · 10% of the exam
The executor of an estate contacts the agent about a policy payable to a named beneficiary. The agent should explain that:
- Proceeds to a named beneficiary pass outside the estate directly to that person
- BThe executor controls the proceeds, since all of the deceased's assets fall under the executor's administration of the estate
- CThe executor must approve the claim before the insurer will pay, since the executor represents the deceased's interests
- DThe proceeds must be paid to the estate first and then distributed to the beneficiary once the estate has been settled
Correct answer: A) Proceeds to a named beneficiary pass outside the estate directly to that person
Named-beneficiary proceeds are not estate assets. The executor may help with documents but has no claim on the money. This is a frequent source of confusion at claim time.
Why the other options are wrong
- BThe executor does not control non-estate assets.
- CExecutor approval is not required.
- DNamed-beneficiary proceeds do not pass through the estate.
Exam tip
Named beneficiary = outside the estate; executor's role is limited to estate-payable policies.
Common mistake
Directing a named beneficiary's proceeds to the executor.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.