LLQP Life Insurance · Component 2.2 · 30% of the exam
A client can obtain the same protection either as riders on one policy or as separate contracts. The comparison should consider:
- Aonly which arrangement the insurer prefers to administer in practice
- Bonly the number of documents the client will have to keep on file
- Conly the total premium, since the coverage amounts are identical either way
- cost, flexibility, policy fees and what happens if the base policy ends
Correct answer: D) cost, flexibility, policy fees and what happens if the base policy ends
Riders often avoid a second policy fee but depend on the base contract surviving. Separate policies cost more in fees but can be cancelled, converted or assigned independently of each other.
Why the other options are wrong
- AAdministrative preference is not a client consideration.
- BDocument count is not a meaningful basis for the decision.
- CCost is one factor among several that matter here.
Exam tip
Riders are cheaper but dependent; separate policies cost more but stand alone.
Common mistake
Choosing riders purely on price without considering their dependency.
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.