LLQP Insurance Product Types 3

Question 1

Which disability income policy provision ensures that benefits are paid only if the insured cannot perform the duties of their own occupation?

Accepted Answer

Own-occupation definition

Answer

The own-occupation definition pays benefits if the insured cannot perform the specific duties of their regular occupation, even if they can work in another field.

Question 2

A critical illness insurance policy typically pays benefits:

Accepted Answer

As a lump sum upon diagnosis of a covered condition

Answer

Critical illness insurance pays a tax-free lump sum upon diagnosis of a specified covered condition, giving the insured financial flexibility.

Question 3

Which long-term care insurance benefit trigger typically requires the insured to be unable to perform a specified number of Activities of Daily Living (ADLs)?

Accepted Answer

ADL benefit trigger

Answer

The ADL benefit trigger releases LTC benefits when the insured cannot independently perform a specified number (usually 2 of 6) of Activities of Daily Living.

Question 4

A participating life insurance policy differs from a non-participating policy because it:

Accepted Answer

Pays dividends to policyholders based on company experience

Answer

Participating policies allow policyholders to share in the insurer's favorable experience through dividends, which are considered a return of excess premium.

Question 5

An equity-indexed annuity (EIA) credits interest based on:

Accepted Answer

The performance of a specific stock market index, subject to a cap and floor

Answer

An equity-indexed annuity ties interest credits to a market index like the S&P 500, but limits gains with a cap and protects against loss with a floor.

LLQP - Life License Qualification Program Practice Test

LLQP - Life License Qualification Program Practice Test

LLQP Insurance Product Types 3