LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
A 'binding receipt' differs from a 'conditional receipt' in that a binding receipt:
- AProvides no coverage at all, since it merely binds the applicant to complete the application process
- BIs the same as a conditional receipt, since both provide temporary coverage until the insurer decides
- CIs required by law in every province, whereas a conditional receipt is offered only at the insurer's discretion and may be withdrawn
- Covers from the receipt date regardless of insurability, whereas a conditional receipt requires standard insurability
Correct answer: D) Covers from the receipt date regardless of insurability, whereas a conditional receipt requires standard insurability
Binding receipts are more generous and less common. Agents must read which type the insurer uses.
Why the other options are wrong
- ABinding receipts do cover.
- BThey differ on the insurability condition.
- CNeither receipt type is required by law.
Exam tip
Binding = covered regardless; conditional = covered if insurable.
Common mistake
Describing a conditional receipt as if it were binding.
What this tests
CISRO competency component 1.3 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.