LLQP Accident & Sickness · Component 4.1 · 10% of the exam
A client's disability policy lapsed six weeks ago for non-payment. The agent should:
- ATell the client a new application is the only route, since a lapsed policy can never be restored by any insurer
- Check whether the grace period has passed and, if so, apply for reinstatement with arrears and evidence
- CBackdate the missed payment so the insurer's records show the policy as continuously in force
- DAdvise the client to claim on the lapsed policy, since the disability began before the lapse date
Correct answer: B) Check whether the grace period has passed and, if so, apply for reinstatement with arrears and evidence
Reinstatement preserves the original issue age, definitions and any favourable terms, so it is almost always better for the client than starting again with a new contract.
Why the other options are wrong
- AReinstatement rights exist for a stated period after lapse.
- CBackdating a payment to conceal a lapse is fraud against the insurer.
- DA lapsed policy provides no coverage for a claim arising after the lapse.
Exam tip
Try reinstatement before recommending a new application.
Common mistake
Replacing a lapsed policy when reinstatement would have preserved better terms.
What this tests
CISRO competency component 4.1 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Accident & Sickness module. Written against the published curriculum.
More from component 4
- The agent's role in the claims process is to:
- A client with a non-cancellable DI policy stops paying premiums after a dispute with the insurer about a claim. The agent should warn that:
- When a client moves to another province, the agent should:
- A client asks to reduce the waiting period on his in-force disability policy. The agent should explain that the change:
- A client on claim asks whether she must keep paying premiums. The accurate answer depends on:
- A client's non-cancellable disability policy reaches the expiry age stated in the contract. At that point:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.