LLQP Accident & Sickness · Component 3.3 · 25% of the exam
A client pays the first premium with the disability application. The agent should explain that this:
- AHas no effect beyond convenience, since coverage can only begin on the date of delivery
- BObliges the insurer to refund double the premium if the application is subsequently declined
- May provide limited conditional coverage, subject to the terms of the receipt and insurability
- DGuarantees the policy will be issued on the terms applied for, since the insurer has accepted money
Correct answer: C) May provide limited conditional coverage, subject to the terms of the receipt and insurability
Conditional coverage depends on the applicant proving insurable on the terms applied for and is capped in amount and duration, so the protection is real but narrow.
Why the other options are wrong
- AThe receipt can provide interim coverage before delivery.
- BA declined application results in a refund of the premium paid, not a penalty.
- DPayment does not commit the insurer to issue anything.
Exam tip
Conditional coverage is real, limited and conditional.
Common mistake
Telling a client they are fully covered from the day they pay.
What this tests
CISRO competency component 3.3 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Accident & Sickness module. Written against the published curriculum.
More from component 3
- An underwriter assigns a disability applicant to occupational class 2 rather than class 4. The practical effect is that:
- A disability applicant discloses a back condition that resolved four years ago with no recurrence. The likely underwriting outcome is:
- Financial underwriting for an individual disability application exists to:
- A critical illness applicant's mother and sister both had breast cancer before fifty. The underwriter is likely to:
- An applicant for long-term care coverage is seventy-two. The insurer is most likely to require:
- Group long-term disability coverage within the non-evidence maximum is issued without individual medical questions because:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.