LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
A critical illness claimant's diagnosis does not match the contract's definition of the covered condition. The agent should explain that:
- payment depends on the contract's own definition, which may be narrower than common usage
- Bthe claim will be paid at a reduced amount reflecting the seriousness of the condition
- Cthe policy is void because the client was already unwell when the claim was made
- Dthe insurer must pay because the client's own doctor has confirmed the diagnosis in writing
Correct answer: A) payment depends on the contract's own definition, which may be narrower than common usage
Critical illness contracts define each covered condition precisely, often requiring particular findings or severity. A serious illness that does not meet the wording is not covered, which is why definitions must be explained at the point of sale.
Why the other options are wrong
- BCritical illness benefits are not scaled to the severity of the illness.
- CA declined claim does not void the policy.
- DA treating doctor's diagnosis does not override the contract's definition.
Exam tip
Critical illness claims turn on the contract's definitions, not common usage.
Common mistake
Selling critical illness coverage by naming conditions without their definitions.
What this tests
CISRO competency component 1.6 — 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.