LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'grace period' provision in the contract:
- ATerminates the policy on the premium due date, with the grace period applying only to reinstatement
- BCan be shorter than the statutory minimum if the owner agrees in exchange for a lower premium at the time of application
- Must provide at least the statutory minimum during which the policy stays in force despite non-payment
- DApplies only to the first premium, since renewal premiums must be paid on the due date
Correct answer: C) Must provide at least the statutory minimum during which the policy stays in force despite non-payment
Contract clauses restate the statutory grace period; they cannot reduce it.
Why the other options are wrong
- AIt keeps the policy in force.
- BA contract cannot shorten the statutory grace period.
- DIt applies to renewal premiums.
Exam tip
Grace period ≥ statutory minimum.
Common mistake
Believing a policy can shorten the grace period by contract.
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.