LLQP Life Insurance · Component 4.2 · 10% of the exam
An insured dies while premiums were being waived under an approved disability claim. The death benefit will be:
- paid in full, since the waiver kept the policy in force without premium payment
- Bdenied, because no premiums were received during the period before the death
- Creduced by the total premiums that were waived during the disability period
- Dlimited to the cash value accumulated before the waiver claim was first approved
Correct answer: A) paid in full, since the waiver kept the policy in force without premium payment
A waiver keeps the contract in force on its normal terms while the disability continues. The benefit is paid as if premiums had been received, and waived amounts are not recovered from the proceeds.
Why the other options are wrong
- BThe waiver is precisely what keeps the coverage in force.
- CWaived premiums are not deducted from the death benefit.
- DThe full death benefit is payable, not the cash value.
Exam tip
A waiver keeps the contract fully in force; nothing is deducted.
Common mistake
Assuming unpaid premiums reduce a benefit when a waiver applied.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.