LLQP Accident & Sickness · Component 2.2 · 30% of the exam
A 'return of premium on surrender/expiry' rider on a CI policy:
- APays the full CI benefit at expiry if the insured has never made a claim under the policy
- Refunds all or part of premiums on cancellation after a minimum period or at expiry, at a much higher cost
- CIs inexpensive because most insureds cancel their policies long before the refund has vested
- DRefunds premiums after a claim has been paid, as a reward for the insured's survival of the illness
Correct answer: B) Refunds all or part of premiums on cancellation after a minimum period or at expiry, at a much higher cost
ROP on surrender/expiry is the expensive version. Vesting schedules mean early cancellation returns little or nothing.
Why the other options are wrong
- AIt refunds premiums, not the benefit.
- CIt adds significantly to the premium.
- DA claim ends the refund entitlement.
Exam tip
ROP on surrender/expiry: high cost, vesting schedule, no claim required.
Common mistake
Advising a client to cancel before the ROP vests.
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.