LLQP Life Insurance · Component 2.2 · 30% of the exam
An accidental death (AD) rider pays:
- AThe base benefit twice for any death, whatever the cause, which is why the rider is commonly called double indemnity coverage
- BA benefit for illness that results in death within a stated period after diagnosis
- An additional benefit if the insured dies as a result of an accident, within the rider's definitions and time limits
- DA monthly income to the family for a stated period after an accidental death
Correct answer: C) An additional benefit if the insured dies as a result of an accident, within the rider's definitions and time limits
AD riders (sometimes called double indemnity) add a benefit for accidental death only, usually requiring death within a set period after the accident. Because most deaths are not accidental, the rider is cheap and should not be confused with base coverage.
Why the other options are wrong
- AAD riders pay only for accidental death.
- BIllness is excluded from accidental death riders.
- DAD riders pay a lump sum, not income.
Exam tip
AD rider: accidental cause, often within a set time after the accident, lump sum. Cheap because accidents are a minority of deaths.
Common mistake
Describing AD as 'double the death benefit'.
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.