LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
The 'statutory conditions' or statutory provisions in a life insurance contract:
- AApply only to group insurance, since individual contracts are governed entirely by their own wording as issued by the insurer
- Terms required by the Act that override inconsistent wording and cannot be varied to the insured's detriment
- CAre optional clauses that the insurer may include if it wishes to offer a more generous contract
- DCan be waived by the agent at the point of sale when the client prefers a simpler contract
Correct answer: B) Terms required by the Act that override inconsistent wording and cannot be varied to the insured's detriment
Statutory provisions protect insureds by setting minimum standards. Policies may be more generous but not less.
Why the other options are wrong
- AThey apply to individual contracts too.
- CStatutory provisions are mandatory minimums, not optional clauses.
- DAgents cannot waive statutory terms.
Exam tip
Statutory provisions = minimum protections that policy wording cannot cut back.
Common mistake
Believing a policy clause can shorten the statutory incontestability protection.
What this tests
CISRO competency component 1.1 — 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.