LLQP Life Insurance · Component 4.2 · 10% of the exam
A claim is submitted where the death resulted from an activity excluded by the policy. The likely outcome is that:
- Athe claim is paid in full and the insurer then recovers the amount from the deceased's estate
- no benefit is payable for that cause, though the insurer may refund premiums if the contract says so
- Cthe full death benefit is paid because exclusions expire with contestability
- Da reduced benefit is paid in proportion to the years the policy was in force
Correct answer: B) no benefit is payable for that cause, though the insurer may refund premiums if the contract says so
An exclusion removes a specified cause from coverage for the life of the contract. Some contracts refund premiums in that situation, and the beneficiary can ask for the denial and its basis in writing.
Why the other options are wrong
- AAn insurer does not pay and then recover from an estate.
- CExclusions do not expire with the contestability period.
- DBenefits are not prorated to the duration of the policy.
Exam tip
Exclusions are permanent; contestability does not remove them.
Common mistake
Telling a family that exclusions fall away after two years.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.