LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A client who flies a private aircraft as a hobby is issued a policy with an aviation exclusion. The effect is that:
- Athe exclusion expires automatically once the contestability period has come to an end
- Bthe insurer will pay the full benefit but recover the amount from the insured's estate
- Cthe policy pays nothing at all if the insured dies while any aircraft is involved in the death
- death resulting from the excluded activity is not covered, while other causes remain insured
Correct answer: D) death resulting from the excluded activity is not covered, while other causes remain insured
An exclusion removes a specified cause from coverage rather than the whole contract. The agent should confirm exactly what the wording covers, since some exclusions reach only piloting and others reach any private flight.
Why the other options are wrong
- AExclusions do not expire with the contestability period.
- BAn insurer does not pay and then recover from the estate.
- COnly the excluded activity is removed, not every death involving an aircraft.
Exam tip
An exclusion removes one cause of death; the rest of the coverage stands.
Common mistake
Telling a client an exclusion voids the policy entirely.
What this tests
CISRO competency component 1.4 — 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.