LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
A term policy's 'renewal' provision:
- ARequires new evidence of insurability at each renewal, so the insurer can reprice the risk on current health
- Lets the owner continue coverage at each term's end without evidence, at the attained-age premium
- CLowers the premium at each renewal, since the insurer has recovered its issue costs during the first term
- DEnds the policy at the end of the term, so the owner must apply for a new policy to stay covered
Correct answer: B) Lets the owner continue coverage at each term's end without evidence, at the attained-age premium
Guaranteed renewability is a key term insurance right; premiums rise at renewal.
Why the other options are wrong
- ANo evidence is required on renewal.
- CRenewal premiums rise with attained age.
- DRenewal continues coverage.
Exam tip
Renewable term: no evidence, higher premium at renewal.
Common mistake
Not warning the client about the renewal premium increase.
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.