LLQP Life Insurance · Component 4.1 · 10% of the exam
A client asks the agent to help cancel a policy she no longer needs. The agent should:
- AOffer to take over the policy himself, since a policy the client no longer needs still has value to someone
- BDecline to help, since cancelling coverage is against the client's interests and the agent cannot be part of it
- Confirm the need has ended, explain what is lost and the alternatives, then process the request if she proceeds
- DSimply stop the pre-authorized premiums, since the policy will lapse on its own at the end of the grace period
Correct answer: C) Confirm the need has ended, explain what is lost and the alternatives, then process the request if she proceeds
Termination is a service the client is entitled to, but the agent's duty includes making sure it is informed. Surrender of a permanent policy may trigger a policy gain and cannot be undone; a lapse by non-payment loses any non-forfeiture election the client might have preferred.
Why the other options are wrong
- ATransferring the policy to the agent would be a gross breach of conduct.
- BRefusing to help is not an option; termination is the client's right.
- DSimply stopping premiums causes a lapse and forfeits the choice of non-forfeiture option.
Exam tip
Before termination: confirm the need ended, explain what is lost and the tax consequences, offer alternatives, then process the request.
Common mistake
Letting a permanent policy lapse when a non-forfeiture option would have served the client better.
What this tests
CISRO competency component 4.1 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.