LLQP Life Insurance · Component 3.2 · 25% of the exam
A complete recommendation should address the beneficiary designation because it determines:
- who receives the money, whether probate is avoided and whether creditors can reach it
- Bthe premium the client will pay for the coverage being recommended
- Cthe underwriting class the insurer will apply to the application
- Dthe length of the contestability period that will apply to the new contract once issued
Correct answer: A) who receives the money, whether probate is avoided and whether creditors can reach it
The designation decides who benefits, how quickly, whether probate applies and whether the proceeds are protected from the owner's creditors. It belongs in the recommendation, not left to a form at the end.
Why the other options are wrong
- BThe premium depends on the insured, not on who is named.
- CUnderwriting assesses the life insured rather than the beneficiary.
- DContestability runs from issue regardless of the designation.
Exam tip
The designation is part of the recommendation, not an afterthought.
Common mistake
Completing a designation box without discussing its consequences.
What this tests
CISRO competency component 3.2 — 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.