LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
For a policy reinstated after lapse, the two-year contestability period:
- Restarts from reinstatement with respect to statements made in the reinstatement application
- BIs waived on reinstatement, since the insurer has already had one opportunity to contest the original application
- CDoes not restart, since the original two-year period from issue continues to run as though no lapse had occurred
- DBecomes ten years, since the insurer treats a reinstated policy as a higher risk than a policy that never lapsed
Correct answer: A) Restarts from reinstatement with respect to statements made in the reinstatement application
Reinstatement evidence is contestable for two years; the original application's contestability (if already expired) is not revived.
Why the other options are wrong
- BContestability restarts for the new statements.
- CIt restarts for reinstatement statements.
- DThe restarted contestability period is two years.
Exam tip
Reinstatement → new 2-year contestability for reinstatement statements.
Common mistake
Advising a client that reinstatement carries no new disclosure risk.
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.