LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The 'effective date' versus the 'issue date' of a policy matters because:
- Contestability, suicide and premium clocks run from the policy date, and backdating changes it
- BThey are always the same date, since the insurer dates the policy on the day it is issued from head office
- CNeither date has any effect on the client's rights, since the contract's terms are fixed whenever it takes effect
- DOnly the agent's commission depends on the dates, since the insurer pays on the issue date rather than the effective date
Correct answer: A) Contestability, suicide and premium clocks run from the policy date, and backdating changes it
Policy dates control key clocks. Backdating to save age is permitted within statutory limits.
Why the other options are wrong
- BThe effective date and issue date can differ, for example with backdating.
- CPolicy dates start the contestability and suicide clocks.
- DThe dates affect client rights, not only commission.
Exam tip
Policy date runs the clocks; backdating to save age within limits.
Common mistake
Misinforming a client about when the two-year periods end.
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.