LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'annuity contract' provisions specify:
- AA death benefit only, since an annuity is a life insurance contract that pays on the annuitant's death
- BThe agent's authority to change the payment amount and frequency on the annuitant's instructions
- The annuitant, payments and dates, the term, any guarantee or refund, the beneficiary, and irrevocability
- DThe investment options available to the annuitant and how returns are credited to the contract each year during the payout
Correct answer: C) The annuitant, payments and dates, the term, any guarantee or refund, the beneficiary, and irrevocability
Annuity provisions define the income promise and what happens at death.
Why the other options are wrong
- AThe income promise is central, not a death benefit.
- BThe agent's authority is not part of the contract.
- DFixed annuities have no investment options.
Exam tip
Annuity provisions: annuitant, amount, frequency, term, guarantee, beneficiary, irrevocable.
Common mistake
Not explaining irrevocability.
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
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