LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
Between application and delivery, an applicant is diagnosed with a serious illness. At delivery the agent must:
- Adeliver the policy quietly, since underwriting was completed before the diagnosis
- Bbackdate the delivery to a date before the diagnosis so the policy takes effect
- Cadvise the client to delay the diagnosis being recorded until after delivery
- disclose the change to the insurer, which may decline to place the contract in force
Correct answer: D) disclose the change to the insurer, which may decline to place the contract in force
A statement of continued insurability is normally required at delivery. A material change in health must be reported, and concealing it would be a misrepresentation that could void the contract at claim.
Why the other options are wrong
- ADelivery requirements test insurability at the moment of delivery.
- BBackdating to avoid disclosure is falsification of the record.
- CAdvising a client to delay a medical record is plainly improper.
Exam tip
Health changes before delivery must be reported to the insurer.
Common mistake
Delivering a policy without asking about changes since the application.
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.