LLQP Life Insurance · Component 2.2 · 30% of the exam
A parent/payor waiver rider on a child's policy provides that:
- AThe policy converts to the parent's name if the parent dies, so the coverage continues on the parent's life
- BThe death benefit is paid to the parent if the child dies, rather than to the child's estate
- If the premium payor dies or becomes disabled, premiums are waived until the child reaches a stated age
- DThe child pays the premiums from a trust the parent establishes when the policy is issued
Correct answer: C) If the premium payor dies or becomes disabled, premiums are waived until the child reaches a stated age
Juvenile policies are paid by a parent. The payor waiver keeps the child's coverage in force if the parent can no longer pay, so the child's insurability and the policy's values are preserved.
Why the other options are wrong
- AThe policy stays in the child's name.
- BThe death benefit is on the child's life, payable per the designation; the rider concerns premiums.
- DThe child does not pay; the payor is the parent.
Exam tip
Payor waiver protects a juvenile policy if the paying parent dies or is disabled: premiums waived to a stated age.
Common mistake
Confusing payor waiver with waiver of premium on the insured's own disability.
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.