LLQP Life Insurance · Component 3.3 · 25% of the exam
A client wants to cancel her existing coverage as soon as she signs the application for a new policy. The agent must:
- Acancel the old policy and rely on the temporary insurance agreement in the meantime
- advise her to keep the existing coverage until the new policy is issued and delivered
- Ccancel the old policy and reinstate it later if the new application is not approved as applied
- Dprocess the cancellation immediately so the client stops paying two premiums
Correct answer: B) advise her to keep the existing coverage until the new policy is issued and delivered
An application is not a contract, and the new coverage may be rated, postponed or declined. Overlapping premiums for a short period are a small price for avoiding a gap the client might never close.
Why the other options are wrong
- ATemporary coverage is limited, conditional and not a substitute.
- CReinstatement requires evidence and may not be available.
- DSaving a premium is not worth the risk of being left uninsured.
Exam tip
Never cancel existing coverage before the new policy is in force.
Common mistake
Letting a client cancel at application to avoid a double premium.
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.