LLQP Life Insurance · Component 2.1 · 30% of the exam
Group term life insurance is generally provided as:
- APermanent coverage with cash values, which the member can take on leaving the group
- BUniversal life, with the employer's contributions deposited to each member's investment account
- CWhole life, with the employer paying the level premium for as long as the member is employed
- Yearly renewable term, with premiums rated for the group as a whole and no cash value
Correct answer: D) Yearly renewable term, with premiums rated for the group as a whole and no cash value
Group life is almost always one-year term renewed annually at a group rate. That is why it is inexpensive, why it has no cash value and why it ends with membership — subject to conversion.
Why the other options are wrong
- AGroup life has no cash values.
- BGroup life is not universal life.
- CGroup life is not whole life.
Exam tip
Group life = yearly renewable term at a group rate: cheap, no cash value, ends with membership (subject to conversion).
Common mistake
Assuming group life builds any value the member can take with them.
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.