LLQP Accident & Sickness · Component 3.3 · 25% of the exam
For a DI application involving replacement of an existing policy, the implementation should ensure:
- The old policy stays in force until the new one is delivered, with replacement disclosure completed
- BNo additional paperwork, since the new application replaces the old policy automatically on issue
- CThe old policy is cancelled first, so that the client is not paying two premiums during underwriting
- DThe old insurer is not informed, since the replacement is a private matter between the client and the agent
Correct answer: A) The old policy stays in force until the new one is delivered, with replacement disclosure completed
Replacement rules protect against a coverage gap and uninformed loss of favourable terms.
Why the other options are wrong
- BReplacement disclosure is required.
- CCancelling first creates a gap if the new policy is declined.
- DDisclosure may be required by rules.
Exam tip
Replacement: keep old until new is in force; complete disclosure; explain restarts.
Common mistake
Cancelling the old DI policy on application day.
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.