LLQP Life Insurance · Component 2.2 · 30% of the exam
A couple with a joint first-to-die policy asks what happens to their coverage if they separate. A policy split option would:
- allow the contract to be divided into two individual policies, often without new evidence
- Bterminate the coverage entirely, leaving each of them to apply for a new contract separately
- Cpay half the death benefit to each of them at the date the separation takes effect
- Dconvert the contract automatically into a joint last-to-die policy on the same two lives
Correct answer: A) allow the contract to be divided into two individual policies, often without new evidence
A split option lets a joint contract become two single life policies on a triggering event such as a separation or a business breakup. Whether evidence is required, and which events qualify, varies between contracts.
Why the other options are wrong
- BThe option exists precisely to avoid a fresh application.
- CNo benefit is paid while both insured persons are living.
- DA split produces individual policies rather than changing the joint design.
Exam tip
Check for a split option before a couple's joint policy is surrendered.
Common mistake
Surrendering a joint policy on separation without checking for a split option.
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.