LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
A life insurance contract 'matures' when:
- AThe premium has been paid for the full number of years set out in the policy's payment schedule and no further premiums are due
- BThe beneficiary reaches the age of majority and becomes entitled to receive the proceeds directly
- It reaches its stated maturity date, when the face amount or cash value is paid and the contract ends
- DThe agent who sold the policy retires, and the contract is transferred to a new servicing agent
Correct answer: C) It reaches its stated maturity date, when the face amount or cash value is paid and the contract ends
Maturity is a termination route for policies with an endowment or age-based payout.
Why the other options are wrong
- APaying a premium continues the policy; it does not mature it.
- BThe beneficiary's age has nothing to do with maturity.
- DThe agent's retirement has nothing to do with a policy maturing.
Exam tip
Maturity = payout to the owner at the stated date/age.
Common mistake
Confusing maturity of a life policy with segregated fund maturity.
What this tests
CISRO competency component 1.3 — 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:
- The 'assignment' provision typically states that:
- The 'personal representative' (executor or administrator) of a deceased owner:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.