LLQP Life Insurance · Component 2.2 · 30% of the exam
A client with a critical illness rider is diagnosed with a covered condition and dies a week later. The likely outcome is that:
- Athe critical illness benefit is paid at half its value because of the short survival
- no critical illness benefit is payable because the survival period was not met
- Cthe critical illness benefit is paid to the estate in addition to the death benefit
- Dboth the critical illness benefit and the death benefit are paid in full to the beneficiary
Correct answer: B) no critical illness benefit is payable because the survival period was not met
The survival period, often thirty days, must be satisfied before a living benefit becomes payable. The life insurance death benefit is unaffected and is paid on its own terms.
Why the other options are wrong
- AThere is no proportionate payment for a partial survival period.
- CThe benefit is not payable at all if the survival period is not met.
- DOnly the death benefit is payable in these circumstances.
Exam tip
Living benefits require survival; death benefits do not.
Common mistake
Explaining a critical illness rider without mentioning the survival period.
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.