LLQP Accident & Sickness · Component 3.2 · 25% of the exam
A recommendation involving replacement of an existing A&S policy must:
- ABe completed as quickly as possible, so that the client is not left uninsured while the new application is being processed
- BBe avoided in every case, since regulators treat the replacement of an existing policy as inherently unsuitable advice
- CIgnore the old policy's terms, since only the new policy's features are relevant to whether it suits the client
- Compare both contracts, disclose the disadvantages, follow provincial rules, and proceed only if the client is clearly better off
Correct answer: D) Compare both contracts, disclose the disadvantages, follow provincial rules, and proceed only if the client is clearly better off
Replacement restarts contestability and pre-existing limits and may lose favourable provisions. Regulators require disclosure.
Why the other options are wrong
- AHaste is the enemy of suitable replacement.
- BReplacement is sometimes appropriate.
- CThe old policy must be analyzed.
Exam tip
Replacement: compare, disclose disadvantages, follow the rules, keep old coverage until new is in force.
Common mistake
Cancelling the old policy before the new one is issued.
What this tests
CISRO competency component 3.2 — 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.