LLQP Life Insurance · Component 1.2 · 35% of the exam
A client's policy was rated years ago for a condition that has since resolved. The agent should:
- Aadvise the client to stop disclosing the condition on any future application
- Btell the client that a rating applied at issue can never be reconsidered
- Crecommend replacing the policy with a new contract at standard rates immediately
- ask the insurer about reconsideration, which may reduce the premium on evidence of improvement
Correct answer: D) ask the insurer about reconsideration, which may reduce the premium on evidence of improvement
Many insurers will review a rating where the underlying condition has improved or the risk has passed. This preserves the original contract and its guarantees while reducing the cost, unlike a replacement.
Why the other options are wrong
- AAdvising non-disclosure would be serious misconduct.
- BReconsideration is commonly available on evidence of improvement.
- CReplacement forfeits the original issue age and any guarantees.
Exam tip
Ask about rating reconsideration before considering any replacement.
Common mistake
Replacing a rated policy that could simply have been reconsidered.
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's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- 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:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.