LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'insuring clause' or 'insuring agreement' of a life policy states:
- The insurer's promise to pay the benefit on proof of death while in force, and the parties and amount
- BThe exclusions that limit the insurer's promise, such as suicide and hazardous activities
- CThe premium schedule only, since the insurer's promise is set out in the statutory provisions
- DThe agent's commission and the servicing arrangements agreed between the agent and the insurer for the life of the contract
Correct answer: A) The insurer's promise to pay the benefit on proof of death while in force, and the parties and amount
The insuring clause is the heart of the contract; other provisions qualify it.
Why the other options are wrong
- BExclusions are separate provisions.
- CPremiums are a separate schedule.
- DCommission is outside the contract.
Exam tip
Insuring clause = the core promise.
Common mistake
Overlooking that the promise is conditioned on the policy being in force.
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.