LLQP Life Insurance · Component 4.1 · 10% of the exam
A client wants to increase the face amount of an existing policy. Typically this requires:
- ANothing but a phone call to the insurer, since the client has already been underwritten for the base policy
- BCancelling the policy and applying for a new one at the higher amount, since face amounts are fixed at issue
- CA court order confirming that the client's dependants need the additional coverage
- Evidence of insurability for the increase, unless a guaranteed insurability option applies
Correct answer: D) Evidence of insurability for the increase, unless a guaranteed insurability option applies
An increase raises the insurer's risk, so it is underwritten. Decreases in coverage generally are not. A GIB rider or option is the exception that allows increases without evidence.
Why the other options are wrong
- AIncreases raise the insurer's risk and require evidence.
- BCancelling the policy is not the way to increase coverage.
- CCourt orders have nothing to do with it.
Exam tip
Increase = underwriting (unless a GIB option applies). Decrease = usually no evidence.
Common mistake
Promising an increase without underwriting.
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.