LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The 'rescission' (free-look) right in life insurance:
- ADoes not exist for life insurance, since the applicant has already had the whole underwriting period to reconsider the purchase
- Lets the owner cancel within a stated period after delivery for a full refund, and must be disclosed
- CLasts one year from delivery, during which the owner may cancel for a refund of premiums paid
- DApplies only to the insurer, which may rescind within the period if new information comes to light
Correct answer: B) Lets the owner cancel within a stated period after delivery for a full refund, and must be disclosed
The free-look period lets the client reconsider without cost. It is a delivery disclosure item.
Why the other options are wrong
- AIt exists by regulation or contract.
- CThe free-look period is days, not a year.
- DIt is the owner's right.
Exam tip
Free-look: ~10 days, full refund; disclose at delivery.
Common mistake
Not mentioning the free-look period.
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.