LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
A grandmother wants a very large permanent policy on her healthy eight-year-old grandson. The agent should:
- Aplace the coverage as requested, since she is willing and able to pay the premiums
- Brecommend the largest amount the insurer will allow to maximize the eventual value
- Crefuse the request outright, because policies on the lives of children may not be issued in Canada
- discuss the actual objective, since a child's death creates no significant financial loss
Correct answer: D) discuss the actual objective, since a child's death creates no significant financial loss
Insurance on a child is usually about future insurability, savings or final expenses rather than income replacement. Insurers limit amounts on juvenile lives, and the recommendation should follow the objective actually identified.
Why the other options are wrong
- AAbility to pay does not establish a need for the amount requested.
- BMaximizing the amount is not a needs-based recommendation.
- CJuvenile policies are issued, within the insurer's limits.
Exam tip
Juvenile coverage is about insurability and savings, not income replacement.
Common mistake
Writing a large juvenile policy without identifying the real objective.
What this tests
CISRO competency component 2.2 — Integrate into practice the rules governing the activities of life insurance agents — which is weighted at 40% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 2
- A prospective client wants to confirm that an agent is properly licensed before meeting him. She should:
- A dual-licensed agent's mutual fund business is reviewed following a client complaint. The review will be conducted by:
- Assuris coverage applies to:
- OLHI's services are available to:
- Complaints about an agent's conduct (as opposed to an insurer's claim decision) should be directed to:
- The best summary of an agent's ethical obligations is to:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.