LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A client with a guaranteed insurability rider wants to add coverage after a serious diagnosis. The agent should explain that:
- Athe rider allows additional coverage at any time regardless of the client's current health
- additional coverage may be purchased only on the option dates the rider specifies
- Cthe insurer will now underwrite the additional amount and may decline it entirely
- Dthe rider is void because the client's health has changed since the policy was issued
Correct answer: B) additional coverage may be purchased only on the option dates the rider specifies
The rider gives a right to buy more coverage without evidence of insurability, but only on the dates or life events set out in it. Once an option date passes unused, that option is generally lost.
Why the other options are wrong
- AThe right is limited to the option dates specified in the rider.
- CNo underwriting applies when the option is exercised on a valid date.
- DA change in health does not void the rider; that is its purpose.
Exam tip
Guaranteed insurability is valuable only on its option dates, so diarize them.
Common mistake
Assuming the rider can be exercised whenever the client needs more coverage.
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.