LLQP Life Insurance · Component 2.2 · 30% of the exam
A client holds a term rider on a permanent policy and asks whether it can become permanent coverage. The agent should:
- Aexplain that riders can never be converted to permanent coverage
- check the rider's own conversion terms, which may differ from the base policy's
- Cconfirm that all riders convert automatically when the base policy reaches maturity
- Dadvise cancelling the rider and applying for a new contract with fresh evidence
Correct answer: B) check the rider's own conversion terms, which may differ from the base policy's
A rider carries its own expiry, renewal and conversion provisions. Reading them tells the client what is available and by when, which usually beats applying with new evidence of insurability.
Why the other options are wrong
- AMany term riders are convertible on their own terms.
- CNo automatic conversion occurs at the base policy's maturity.
- DA new application risks a worse outcome if health has changed.
Exam tip
Read the rider's own conversion terms; they are not the base policy's.
Common mistake
Assuming a rider shares the base policy's conversion rights.
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.