LLQP Life Insurance · Component 2.1 · 30% of the exam
An employer is considering changing the benefits under its group life plan. Members should understand that:
- Abenefits are guaranteed to each member for as long as the employment continues
- Bthe insurer must maintain the existing benefits for a further five years
- Cany reduction requires the written consent of every member of the plan
- the sponsor may amend or terminate the plan, so the coverage is not secure
Correct answer: D) the sponsor may amend or terminate the plan, so the coverage is not secure
The master contract is between the employer and the insurer, and the employer may change or end it. This vulnerability is one of the main reasons individual coverage is recommended alongside a group plan.
Why the other options are wrong
- AGroup benefits are not guaranteed for the duration of employment.
- BNo such continuation obligation binds the insurer.
- CMembers do not individually consent to plan changes.
Exam tip
Group coverage can be amended or ended by the sponsor at any time.
Common mistake
Presenting group benefits as a secure long-term foundation.
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.