LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
The insurer discovers at claim that the life insured's age was misstated. The claim is:
- APaid to the agent, who holds it until the true age has been established to the insurer's satisfaction
- BDoubled, since the insurer's failure to verify the age at issue is treated as a breach of its own duty of good faith to the client
- Paid at the amount the premium would have bought at the true age, unless that age was uninsurable
- DDenied, since misstatement of age is a material misrepresentation that voids the contract
Correct answer: C) Paid at the amount the premium would have bought at the true age, unless that age was uninsurable
Age misstatement is a claim adjustment, not a defence to payment.
Why the other options are wrong
- AProceeds are never paid to the agent.
- BAge misstatement never doubles the benefit.
- DThe benefit is adjusted, not denied.
Exam tip
Age misstatement at claim → adjust the benefit.
Common mistake
Advising a beneficiary the claim will be denied for an age error.
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.