LLQP Accident & Sickness · Component 3.3 · 25% of the exam
For an A&S contract to be formed, the following must generally occur:
- AThe agent is paid the first-year commission, which confirms that the insurer has accepted the risk
- BThe client signs the application, which is the moment at which the insurer becomes legally bound
- Approval, first premium paid, delivery, and no change in insurability in between
- DThe client reads the policy brochure and confirms in writing that the coverage has been fully understood
Correct answer: C) Approval, first premium paid, delivery, and no change in insurability in between
Offer, acceptance, consideration and delivery — with the 'no change in health' condition — complete the contract. Agents must check for changes at delivery.
Why the other options are wrong
- ACommission is not a contract element.
- BSigning is only the offer.
- DBrochures are not contractual.
Exam tip
Contract formation: application, approval, premium, delivery, no change in insurability.
Common mistake
Delivering a policy without asking about health changes since application.
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.