LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
An insurer pays a base death benefit but declines the accidental death rider. The beneficiary should understand that:
- Athe rider must be paid because the base policy claim was accepted by the insurer
- each benefit is assessed against its own conditions, and the rider's were not met
- Cthe decision cannot be questioned once the base benefit has been paid out
- Ddeclining any part of a claim means the whole contract has been treated as void from the outset
Correct answer: B) each benefit is assessed against its own conditions, and the rider's were not met
Riders carry their own definitions and conditions. A death that qualifies under the base policy may not meet a rider's accidental definition, and the beneficiary can ask for the reasons in writing and challenge them.
Why the other options are wrong
- AAcceptance of one benefit does not compel payment of another.
- CA declined benefit can be questioned through the complaints process.
- DA partial decline does not void the contract or the payment made.
Exam tip
Each rider is assessed against its own wording, separately from the base policy.
Common mistake
Assuming acceptance of a death claim means every rider must also pay.
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.