LLQP Life Insurance · Component 2.1 · 30% of the exam
A client who was rated as a smoker has now been tobacco-free for over a year. She should be told that:
- Asmoking classifications are permanent and cannot be altered after the policy is issued
- Bthe insurer adjusts the rate automatically once a policy anniversary has passed
- she may apply for reclassification, which usually requires evidence and a stated tobacco-free period
- Dshe must replace the policy entirely in order to obtain non-smoker rates
Correct answer: C) she may apply for reclassification, which usually requires evidence and a stated tobacco-free period
Most insurers will reconsider the classification after a stated tobacco-free period, on a declaration and sometimes a test. This preserves the existing contract and its guarantees rather than requiring a new one.
Why the other options are wrong
- AReclassification is commonly available on evidence.
- BThe client must apply; the change is not made automatically.
- DReplacement forfeits the existing contract unnecessarily.
Exam tip
Ask about smoker reclassification before considering any replacement.
Common mistake
Leaving a former smoker on smoker rates for years after quitting.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Life Insurance module. Written against the published curriculum.
More from component 2
- A client has a need lasting about twenty years and compares a ten-year and a twenty-year term policy. The main point to explain is that:
- A client exercises the conversion privilege on his term policy. The permanent premium will be based on:
- A client notices that a small policy costs proportionately more per unit of coverage than a larger one. The explanation is that:
- A client wants to pay monthly rather than annually. The agent should explain that monthly payment:
- A client asks why dividends from her participating policy are not taxed like interest from a bank. The reason is that a dividend is:
- A universal life policyholder is choosing among the investment options inside her policy. She should understand that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.