LLQP Life Insurance · Component 1.2 · 35% of the exam
A review finds a client's term policy was 'backdated to save age' when issued. The practical effect today is that:
- APremiums are refunded for the backdated period, since the client received no coverage during the months before the application was signed
- BThe contestability period is longer, since the insurer had less information about the client at the earlier date
- CThe policy is invalid, since a contract cannot take effect on a date before the application was signed
- The renewal and conversion dates run from the earlier policy date, so deadlines arrive sooner
Correct answer: D) The renewal and conversion dates run from the earlier policy date, so deadlines arrive sooner
Backdating sets the policy date earlier to use a younger age for premiums. All contract dates — term expiry, renewal, conversion — run from that date. The review should confirm the policy date, not the delivery date.
Why the other options are wrong
- ANo refund arises from backdating; the client paid the back premiums to obtain the younger age.
- BContestability runs from the policy date, which if anything makes it end sooner.
- CBackdating within permitted limits is valid.
Exam tip
Use the policy date, not the signing or delivery date, when tracking deadlines.
Common mistake
Calculating conversion deadlines from the date the client remembers buying the policy.
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.