LLQP Accident & Sickness · Component 2.2 · 30% of the exam
A 'premium refund at age 65' on an LTC or DI policy is a form of:
- ACost-of-living adjustment, indexing the benefit each year until the insured reaches the stated age
- BWaiver of premium, ending the insured's obligation to pay once the stated age has been reached
- Return-of-premium rider, refunding a percentage of premiums at the stated age if claims were limited
- DConversion privilege, exchanging the policy for a different product when the stated age is reached
Correct answer: C) Return-of-premium rider, refunding a percentage of premiums at the stated age if claims were limited
Age-triggered refunds are ROP variants. Their economics should be compared with investing the extra premium.
Why the other options are wrong
- ACOLA indexes benefits; it refunds nothing.
- BWaiver stops premiums; it does not refund them.
- DConversion changes the product; it does not refund premiums.
Exam tip
Refund at a stated age = ROP variant; compare cost with investing the difference.
Common mistake
Treating an ROP refund as a guaranteed investment return.
What this tests
CISRO competency component 2.2 — 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.