LLQP Life Insurance · Component 2.1 · 30% of the exam
A 'living benefit' provision in a group life plan allows:
- A terminally ill member to receive part of the group death benefit in advance
- BThe employer to reduce premiums for members who have not claimed during the year, as a reward for good health
- CMembers to borrow against the plan's reserves for medical expenses, repaying the loan from the death benefit
- DRetirees to keep full coverage for life, provided they continue to pay the group rate directly to the insurer
Correct answer: A) A terminally ill member to receive part of the group death benefit in advance
Many group plans include an accelerated benefit for terminal illness, mirroring the rider on individual policies. It provides funds during the member's final months and reduces the amount later paid to the beneficiary.
Why the other options are wrong
- BPremium reduction is unrelated.
- CGroup life has no cash value to borrow against.
- DRetiree coverage depends on plan terms, not a living benefit.
Exam tip
Group living benefit = accelerated death benefit for terminal illness.
Common mistake
Assuming group plans never offer accelerated benefits.
What this tests
CISRO competency component 2.1 — 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.