LLQP Life Insurance · Component 2.2 · 30% of the exam
A client asks whether a disability income rider on his life policy replaces a stand-alone disability policy. The agent should explain that a rider:
- Apays only after a stand-alone disability policy has exhausted its benefit period
- Bcannot be claimed while the client remains employed in any capacity at all
- Cprovides identical coverage to an individual disability contract at a lower cost
- typically offers a smaller benefit and narrower terms than a stand-alone contract
Correct answer: D) typically offers a smaller benefit and narrower terms than a stand-alone contract
Riders are usually capped at modest amounts with shorter benefit periods and less favourable definitions. They can be useful additions but rarely provide the protection a properly designed disability contract does.
Why the other options are wrong
- AThe rider pays on its own terms rather than after another policy.
- BPartial or residual provisions may allow a claim while working.
- CRider terms are generally narrower than a stand-alone contract.
Exam tip
A disability rider supplements a stand-alone contract rather than replacing it.
Common mistake
Presenting a rider as full disability coverage.
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.