LLQP Life Insurance · Component 2.2 · 30% of the exam
A client asks whether waiver of premium would keep her universal life policy funded during disability. The agent should explain that:
- AWaiver applies only to term policies, since permanent policies have cash value to draw on during a disability and need no waiver
- BWaiver pays the death benefit early if the insured is totally disabled for more than two years
- CWaiver does not exist on universal life, since the flexible deposit structure makes it unnecessary
- UL waiver riders usually waive a defined amount, so she should confirm what is covered rather than assume the full deposit continues
Correct answer: D) UL waiver riders usually waive a defined amount, so she should confirm what is covered rather than assume the full deposit continues
Because UL deposits are flexible, the rider must define what it waives. A rider that covers only the cost of insurance keeps the policy alive but not the savings plan. Reading the rider's terms is the rider analysis the curriculum expects.
Why the other options are wrong
- AWaiver is available on permanent products, including UL.
- BWaiver does not pay the death benefit early.
- CWaiver riders do exist on universal life.
Exam tip
UL waiver riders define what is waived: cost of insurance only, or a stated deposit. Read the definition.
Common mistake
Assuming UL waiver keeps the client's full savings deposits going.
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.