LLQP Life Insurance · Component 2.2 · 30% of the exam
Which statement about riders is TRUE?
- ARiders always expire before the base policy, since they are priced for a shorter period than the base coverage
- BRiders are identical across all insurers, since the industry uses standard wording for each type
- CRiders cannot be removed once added, since they form part of the contract from issue
- Riders may have their own expiry ages, definitions and exclusions that differ from the base policy
Correct answer: D) Riders may have their own expiry ages, definitions and exclusions that differ from the base policy
A waiver rider may end at 60 or 65 while the policy continues for life; an AD rider may expire at 70. Each rider is its own set of terms. Reviewing rider expiries is part of assessing existing coverage.
Why the other options are wrong
- ASome riders expire before the base policy, some do not.
- BRiders differ across insurers.
- CRiders can generally be removed.
Exam tip
Each rider has its own expiry age, definitions and exclusions. Record them during the existing-coverage review.
Common mistake
Assuming a rider lasts as long as the policy.
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.