LLQP Accident & Sickness · Component 3.3 · 25% of the exam
A 'pre-authorized debit' (PAD) premium arrangement requires:
- The client's signed authorization and banking details, and awareness that missed payments risk lapse
- BAnnual renewal of the authorization, since a pre-authorized debit expires automatically after twelve months
- CA credit check on the client, since the insurer is extending credit until each monthly premium is collected
- DNothing beyond the client's verbal agreement, since the bank confirms the arrangement directly with the insurer
Correct answer: A) The client's signed authorization and banking details, and awareness that missed payments risk lapse
PAD is the common premium mode. Agents should explain what happens if payments fail.
Why the other options are wrong
- BPAD continues until cancelled.
- CCredit checks are not standard.
- DAuthorization is required.
Exam tip
PAD: signed authorization; explain lapse risk on missed payments.
Common mistake
Not explaining the consequences of a returned payment.
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.