LLQP Life Insurance · Component 4.1 · 10% of the exam
A client is leaving Canada permanently. Why should the agent review her life insurance before she goes?
- ANothing changes, since a Canadian policy pays the same benefit wherever the insured happens to die
- Residency can affect the insurer's willingness to continue coverage, tax and claims; the review should confirm the contract's terms
- CShe must pay all future premiums in advance, since the insurer cannot collect from a foreign bank account
- DThe policy is automatically cancelled when she leaves Canada, since provincial law no longer governs the contract once the insured is a non-resident
Correct answer: B) Residency can affect the insurer's willingness to continue coverage, tax and claims; the review should confirm the contract's terms
'Leaving Canada' is on the curriculum's list of factors that could affect insurance needs. Existing policies usually continue, but new applications, currency, tax residency and the emigration deemed disposition all warrant attention before departure.
Why the other options are wrong
- AResidency can affect coverage, tax and claims practicality.
- CAdvance payment of all premiums is not required.
- DPolicies are not cancelled when the insured leaves Canada.
Exam tip
Before a client emigrates, confirm the contract's terms on foreign residence and consider tax residency and the emigration deemed disposition.
Common mistake
Assuming insurance is unaffected by a move abroad.
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.