LLQP Life Insurance · Component 2.2 · 30% of the exam
A client asks what happens to his riders if he surrenders the base policy. The answer is that the riders:
- Aremain in force until the end of the policy year and then lapse
- Bcontinue as independent contracts with the insurer on the same terms
- terminate with the base policy, since a rider cannot exist on its own
- Dconvert automatically into individual policies at the client's attained age
Correct answer: C) terminate with the base policy, since a rider cannot exist on its own
A rider is part of the contract it is attached to, so it ends when that contract does. Coverage the client wants to keep must be arranged as a separate policy before the base contract is surrendered.
Why the other options are wrong
- ATermination follows the base policy rather than the policy year.
- BA rider has no independent existence apart from the base policy.
- DNo automatic conversion to individual policies occurs.
Exam tip
Riders live and die with the contract they are attached to.
Common mistake
Surrendering a base policy and losing valuable riders with it.
What this tests
CISRO competency component 2.2 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Life Insurance module. Written against the published curriculum.
More from component 2
- A client has a need lasting about twenty years and compares a ten-year and a twenty-year term policy. The main point to explain is that:
- A client exercises the conversion privilege on his term policy. The permanent premium will be based on:
- A client notices that a small policy costs proportionately more per unit of coverage than a larger one. The explanation is that:
- A client wants to pay monthly rather than annually. The agent should explain that monthly payment:
- A client asks why dividends from her participating policy are not taxed like interest from a bank. The reason is that a dividend is:
- A universal life policyholder is choosing among the investment options inside her policy. She should understand that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.