LLQP Life Insurance · Component 2.1 · 30% of the exam
In a group plan, the 'master contract' is:
- AThe beneficiary designation form that each member completes at enrolment and files with the sponsor
- BA contract with the provincial government under which the plan is registered for tax purposes
- CThe certificate each member receives, which sets out the coverage and is the member's contract with the insurer
- The contract between the insurer and the plan sponsor that sets all terms of the group coverage
Correct answer: D) The contract between the insurer and the plan sponsor that sets all terms of the group coverage
The master contract governs; certificates summarize it for members. In a dispute the master contract prevails, which is why members should read the certificate's statement that it is a summary.
Why the other options are wrong
- AThe beneficiary form is a member document.
- BNo government contract is involved.
- CThe certificate is the member's summary, not the master contract.
Exam tip
Master contract governs; certificates summarize. In a conflict the master contract prevails.
Common mistake
Relying on the certificate wording as the definitive terms.
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.