LLQP Life Insurance · Component 1.2 · 35% of the exam
When reviewing a client's existing individual policy, which detail determines whether the coverage can continue past its current term without new evidence of insurability?
- AThe dividend option selected, since it determines whether the policy can carry itself
- BThe name of the agent who sold it, since the original contract governs the terms
- Whether the policy is renewable, and to what age, under its own provisions
- DThe premium mode, since annually paid policies are more likely to be renewed
Correct answer: C) Whether the policy is renewable, and to what age, under its own provisions
Renewability is the contractual right to continue term coverage at the end of the term, at a new (higher) premium, without medical evidence, up to a stated age. A non-renewable term policy simply ends. This is one of the coverage details the curriculum lists under existing coverage.
Why the other options are wrong
- AThe dividend option affects a participating policy's values, not renewability.
- BWho sold the policy has no bearing on its provisions.
- DThe premium mode affects cost, not renewability.
Exam tip
Renewability and convertibility are the two rights that protect insurability in a term policy; always record their expiry ages.
Common mistake
Assuming every term policy can be renewed indefinitely.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.