LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The 'misstatement of age' provision in life insurance:
- AVoids the policy from inception, since age is a material fact on every application
- BDoubles the benefit if the insured was younger than stated, to compensate for the overpaid premium over the years
- CHas no effect on the contract, since the insurer accepted the risk at the stated age
- Adjusts the benefit to what the premium would have bought at the correct age, unless outside issue limits
Correct answer: D) Adjusts the benefit to what the premium would have bought at the correct age, unless outside issue limits
Age errors are remedied by adjustment, a statutory protection against forfeiture for innocent mistakes.
Why the other options are wrong
- AThe remedy is adjustment, not voidance.
- BMisstatement of age never doubles the benefit.
- CThe benefit is recalculated.
Exam tip
Misstated age → adjust benefit or premium.
Common mistake
Telling a client an age error voids coverage.
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.