LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
A family cannot find the policy document for a client they believe was insured. The agent should explain that:
- Athe family must apply to a court for an order replacing the missing policy document
- the contract exists in the insurer's records, so a claim can proceed without the document
- Cthe insurer will pay only the cash surrender value when the document cannot be produced
- Dno claim can be made at all without producing the original policy document to the insurer
Correct answer: B) the contract exists in the insurer's records, so a claim can proceed without the document
The policy document is evidence of the contract, not the contract itself. Insurers can identify coverage from their own records, and a search service exists to help families locate policies they cannot find.
Why the other options are wrong
- ANo court order is needed to claim on a policy the insurer can identify.
- CThe full death benefit is payable regardless of the document's whereabouts.
- DA missing document does not defeat a valid claim.
Exam tip
A lost policy document does not prevent a claim from being paid.
Common mistake
Telling a family the original policy must be produced before a claim.
What this tests
CISRO competency component 1.6 — 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.