LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
A critical illness policyholder is diagnosed with a covered condition but dies four days later. The survival period provision typically means that:
- no critical illness benefit is payable because the insured did not survive the stated period
- Bthe benefit is reduced in proportion to the number of days the insured actually survived
- Cthe benefit is payable in full because the diagnosis was made while the policy was in force
- Dthe benefit becomes payable to the estate together with an additional accidental death amount
Correct answer: A) no critical illness benefit is payable because the insured did not survive the stated period
Most critical illness contracts require the insured to survive a stated period, commonly thirty days, after diagnosis. Where a return of premium on death benefit exists it may apply instead, which is why the rider structure matters.
Why the other options are wrong
- BThe provision is a threshold, not a proportional calculation.
- CDiagnosis alone does not satisfy a contract that also requires survival.
- DAn accidental death amount comes from a different contract or rider entirely.
Exam tip
Critical illness benefits require both diagnosis and survival of the stated period.
Common mistake
Explaining critical illness coverage without mentioning the survival requirement.
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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