LLQP Life Insurance · Component 3.3 · 25% of the exam
A client offers to write the first premium cheque payable to the agent personally. The agent should:
- Aaccept it and transfer the funds to the insurer from a personal account
- Baccept cash instead, which avoids any question about the payee
- Caccept it and hold it until the policy has been approved and issued
- ask for the cheque to be made payable to the insurer instead
Correct answer: D) ask for the cheque to be made payable to the insurer instead
Client money must never pass through an agent's hands or accounts. A cheque payable to the insurer removes any question about handling funds and creates a clear record of the payment.
Why the other options are wrong
- APassing client money through a personal account is misappropriation.
- BCash raises money laundering concerns and is worse, not better.
- CHolding a payment delays coverage and creates handling risk.
Exam tip
Payments are made payable to the insurer, always.
Common mistake
Accepting a cheque made out personally as a matter of convenience.
What this tests
CISRO competency component 3.3 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.