LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A client with a waiver of premium rider becomes disabled and asks when the insurer will stop billing him. The agent should explain that:
- Apremiums stop from the very first day of the disability, with any earlier payments refunded in full
- the waiver begins after the rider's qualifying period, once the disability definition is met
- Cpremiums are never waived and the rider simply lends the client the amount required
- Dthe waiver applies only after the policy has been in force for a further five years
Correct answer: B) the waiver begins after the rider's qualifying period, once the disability definition is met
The rider waives premiums once the insured has been disabled for a stated qualifying period and meets the contract's definition of disability. Premiums paid during that waiting period are commonly refunded once the claim is approved.
Why the other options are wrong
- AA qualifying period must pass before the waiver begins.
- CThe rider waives the premium rather than advancing a loan.
- DNo further in-force requirement applies once the rider is in effect.
Exam tip
Waiver of premium has a qualifying period and its own disability definition.
Common mistake
Telling a client premiums stop from the first day of a disability.
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.