LLQP Policy Provisions and Riders 2

Question 1

What is the 'incontestability clause' in a Canadian life insurance policy?

Accepted Answer

A clause preventing the insurer from voiding the policy after it has been in force for a specified period

Answer

A clause preventing the policyholder from contesting premium increases

Answer

A clause that makes the policy non-transferable

Answer

A clause requiring mandatory arbitration for all disputes

Question 2

What is the purpose of the 'grace period' provision in a life insurance policy?

Accepted Answer

A period after a premium due date during which the policy remains in force despite non-payment

Answer

A period during which the policyholder can return the policy for a full refund

Answer

A waiting period before coverage begins

Answer

A period during which claims are processed more quickly

Question 3

What is an 'automatic premium loan' (APL) provision in a permanent life insurance policy?

Accepted Answer

A provision that automatically borrows against the policy's cash value to pay overdue premiums

Answer

An automatic loan from a bank to pay premiums

Answer

A loan given to the agent to cover client premiums

Answer

An automatic increase in premiums based on inflation

Question 4

What is the 'accidental death benefit' (ADB) rider and how does it modify the base policy?

Accepted Answer

It provides an additional death benefit if the insured dies as a result of an accident

Answer

It provides a benefit for any cause of death

Answer

It accelerates the death benefit if the insured has a terminal illness

Answer

It provides income replacement if the insured is injured in an accident

Question 5

What is the 'free look' or 'cooling off' period in Canadian insurance?

Accepted Answer

A period after policy delivery during which the policyholder can cancel for a full refund

Answer

A period where the agent provides free consulting

Answer

A period where premiums are waived for new policyholders

Answer

A period during which the insurer reviews the application without commitment

Question 6

What does the 'assignment' provision allow a policyholder to do?

Accepted Answer

Transfer ownership or specific rights of the policy to another party

Answer

Assign their agent to a different insurance company

Answer

Assign a specific death date for policy payout calculations

Answer

Delegate premium payment responsibilities to a family member