LLQP Life Insurance · Component 2.2 · 30% of the exam
A client is considering a critical illness rider versus a stand-alone critical illness policy. A reason to prefer the stand-alone policy is:
- AIt is always cheaper, since the insurer does not have to coordinate the CI benefit with the life coverage under a single contract
- Its benefit is independent of the life coverage and survives changes to the base policy
- CIt has no survival period, so the benefit is paid on the day of diagnosis without any waiting requirement
- DIt requires no underwriting, since a stand-alone CI policy is issued on the basis of the application alone
Correct answer: B) Its benefit is independent of the life coverage and survives changes to the base policy
Stand-alone CI is a complete contract with its own terms, often more comprehensive than a rider. A rider is convenient and can be cheaper, but it is tied to the base policy and may be an accelerated design.
Why the other options are wrong
- AStand-alone CI is often more expensive.
- CBoth have survival periods.
- DCI is underwritten either way.
Exam tip
CI rider = convenience, tied to base policy. Stand-alone CI = independence and often broader coverage.
Common mistake
Assuming a CI rider provides the same coverage as a full CI policy.
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.