LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
A life policy may be 'terminated' by:
- AThe agent, who may cancel a policy that is no longer suitable for the client
- BOnly the insurer, since the owner's sole remedy is to stop paying premiums and let the policy lapse at the end of the grace period
- Surrender, lapse, expiry, death benefit payment, maturity, or rescission within contestability
- DThe beneficiary, who may disclaim the policy and bring the contract to an end
Correct answer: C) Surrender, lapse, expiry, death benefit payment, maturity, or rescission within contestability
Termination routes are defined; insurers cannot cancel an in-force life policy at will.
Why the other options are wrong
- AAgents have no authority to terminate.
- BThe owner has surrender rights; insurers' rights are limited.
- DBeneficiaries have no such power.
Exam tip
Termination: surrender, lapse, expiry, death, maturity, rescission (within 2 years).
Common mistake
Believing an insurer can cancel a life policy after a claim on another policy.
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:
- 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.