LLQP Life Insurance · Component 2.2 · 30% of the exam
When comparing two insurers' waiver of premium riders, which difference most affects their value?
- AThe colour and format of the policy document, which shows how clearly each insurer sets out its terms
- BThe insurer's head office location, since claims are handled faster when the insurer is in the client's province
- CThe commission rate on the rider, which indicates how much the insurer expects to pay in claims
- The definition of disability, the waiting period, and the age to which the waiver applies
Correct answer: D) The definition of disability, the waiting period, and the age to which the waiver applies
The curriculum's rider analysis calls for comparing equivalent riders across carriers. Riders with the same name can differ materially in their definitions, waiting periods and expiry ages; the fine print determines whether a claim is paid.
Why the other options are wrong
- APresentation has no bearing on the rider's value.
- BHead office location is irrelevant.
- CCommission does not change what the rider pays.
Exam tip
Compare riders on definitions, waiting periods and expiry ages. Same name, different terms, different value.
Common mistake
Assuming riders with the same name are equivalent across insurers.
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.