LLQP Accident & Sickness · Component 2.1 · 30% of the exam
A 'cancellable' or 'commercial' disability policy allows the insurer to:
- ARaise premiums for the class but never refuse to renew an individual policy
- BMake no changes at all, since the policy renews automatically each year
- CReduce benefits at renewal but never change the premium once issued
- Cancel or decline to renew at any renewal date, and change premiums
Correct answer: D) Cancel or decline to renew at any renewal date, and change premiums
Renewability provisions run from cancellable (weakest) through conditionally renewable and guaranteed renewable to non-cancellable (strongest). Cancellable coverage can vanish when the client needs it most.
Why the other options are wrong
- ABeyond raising premiums, a cancellable policy lets the insurer refuse renewal.
- BThe insurer has broad rights under a cancellable policy.
- CCancellation, not benefit reduction, is the main risk.
Exam tip
Renewability ladder: cancellable < conditionally renewable < guaranteed renewable < non-cancellable.
Common mistake
Recommending cheap cancellable coverage without explaining the risk.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Accident & Sickness module. Written against the published curriculum.
More from component 2
- A group benefits booklet lists AD&D coverage alongside life and LTD. The AD&D benefit pays:
- A hospital indemnity (hospital cash) policy pays:
- Employment Insurance sickness benefits are available to:
- Which government program coordinates with an individual DI policy through a possible offset AND also affects the definition of insurable income?
- A group plan's 'eligibility waiting period' (probationary period) is:
- A CI policy that is 'convertible' allows the insured to:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.