LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The 'incontestability' provision means that after the policy has been in force for two years during the life insured's lifetime:
- The insurer cannot void the contract or deny a claim for misrepresentation, except for fraud
- BThe beneficiary can be changed by the insurer, since the owner's rights are fixed at the two-year point
- CThe premium is waived for the balance of the contract, since the insurer has recovered its issue costs
- DThe insurer can never deny a claim for any reason at all, since the contract is beyond challenge on every ground
Correct answer: A) The insurer cannot void the contract or deny a claim for misrepresentation, except for fraud
Incontestability balances the disclosure duty with certainty. Fraud remains contestable indefinitely; other exclusions (suicide within two years, age misstatement) are separate.
Why the other options are wrong
- BOnly the owner changes beneficiaries.
- CPremium is unrelated to incontestability.
- DFraud and policy exclusions still apply.
Exam tip
Incontestable after 2 years except fraud.
Common mistake
Thinking incontestability makes fraudulent applications safe.
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.