LLQP Life Insurance · Component 1.2 · 35% of the exam
A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- ARecommend replacing them because the original agent is gone and the new agent cannot service another agent's contracts
- BCancel them and start again, since policies sold by an agent who has left the business cannot be relied on
- CRefuse to review them, since the reviewing agent has no relationship with the insurers that issued them
- Assess them on their merits, exactly as if the reviewing agent had sold them
Correct answer: D) Assess them on their merits, exactly as if the reviewing agent had sold them
Who sold a policy is irrelevant to its suitability. A review is an objective assessment. Recommending replacement for reasons unrelated to the client's interest is precisely what replacement rules and ethics prohibit.
Why the other options are wrong
- AThe original agent's departure has no bearing on the policy's value.
- BCancellation without analysis is unsuitable.
- CReviewing existing coverage is part of serving the client.
Exam tip
Orphaned policies are reviewed on their merits. The client's interest, not the book of business, decides.
Common mistake
Treating another agent's policies as replacement targets.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
- A client owns a cottage that has appreciated substantially. Why does this matter in a life insurance needs analysis?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.