LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'accident and sickness' provisions attached to a life policy (for example, a CI or DI rider) are governed by:
- AOnly the life insurance part of the Act, since the rider forms part of the life policy to which it is attached
- The accident and sickness part of the Act for those benefits, with its own statutory conditions
- CProperty insurance rules, since disability and critical illness benefits indemnify a financial loss
- DNo law at all, since riders are optional additions that fall outside the Act's definition of a contract
Correct answer: B) The accident and sickness part of the Act for those benefits, with its own statutory conditions
Different parts of the Act apply to different benefits within one contract.
Why the other options are wrong
- AA&S provisions have their own statutory conditions.
- CThey are not property insurance.
- DThe Insurance Act applies to riders.
Exam tip
A&S riders on life policies follow A&S statutory conditions.
Common mistake
Applying life claim rules to a disability rider claim.
What this tests
CISRO competency component 1.4 — 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.