LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A couple wants coverage on both lives but only one of them needs a large amount. A term rider on the spouse would:
- Arequire the spouse to become a joint owner of the whole contract as a condition
- Bdouble the amount of coverage on the primary insured without adding any protection for the spouse
- Cpay only if both insured persons die within the same twelve-month period
- provide separate coverage on the spouse within the same contract, usually at a lower cost
Correct answer: D) provide separate coverage on the spouse within the same contract, usually at a lower cost
A spousal term rider adds coverage on the second life inside the existing contract, avoiding a second policy fee. The rider's term, renewal and conversion rights should be checked because they differ from the base policy.
Why the other options are wrong
- AA rider does not require the spouse to become an owner of the contract.
- BThe rider covers the spouse's life rather than increasing the base coverage.
- CEach life is covered separately; there is no common disaster condition.
Exam tip
A rider adds a second life cheaply, but check its own term and conversion rights.
Common mistake
Adding a rider without comparing its conversion rights to a separate policy.
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
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