LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'death benefit option' in universal life (level vs increasing):
- AApplies to whole life only, since universal life pays a single fixed amount regardless of the fund's value at death
- BIs chosen by the insurer at issue, based on the age and health of the life insured
- CDoes not exist, since every universal life policy pays the face amount plus the fund at death
- Lets the owner choose a level benefit including the fund, or an increasing benefit of face amount plus fund
Correct answer: D) Lets the owner choose a level benefit including the fund, or an increasing benefit of face amount plus fund
The choice affects net amount at risk, COI and exempt-test room.
Why the other options are wrong
- ADeath benefit options apply to universal life.
- BThe option is chosen by the owner.
- CThe option is a standard universal life feature.
Exam tip
UL death benefit: level (face includes fund) vs increasing (face + fund).
Common mistake
Not explaining that a level option means the fund is not paid in addition.
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.