LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
A client in his late fifties asks to convert his term policy to permanent coverage. The agent should check:
- Aonly whether the client can afford the higher premium the permanent contract will require
- Bwhether the insurer has issued a new product to replace the original term contract
- whether the conversion right is still available, since it usually ends at a stated age
- Dwhether the client can pass a medical examination for the permanent contract
Correct answer: C) whether the conversion right is still available, since it usually ends at a stated age
Conversion rights typically expire at a stated age or after a set period. The point of the right is that no evidence of insurability is needed, so the deadline is what matters and should be diarized in advance.
Why the other options are wrong
- AAffordability matters, but availability of the right is the threshold question.
- BNew products do not remove or extend a contractual conversion right.
- DConversion is exercised without evidence of insurability.
Exam tip
Conversion needs no medical but does have an expiry age; track it.
Common mistake
Discovering a conversion deadline only after it has passed.
What this tests
CISRO competency component 1.3 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.