LLQP Life Insurance · Component 1.2 · 35% of the exam
A review finds that a client's existing policy has an aviation exclusion from when he was a private pilot. He stopped flying five years ago. The agent should:
- AIgnore it because exclusions are harmless once the activity has stopped, and the insurer will not enforce it when a claim arises
- BAssume the exclusion no longer applies, since exclusions lapse automatically after the contestability period ends
- CCancel the policy and apply for a new one without the exclusion, since the insurer will not amend an existing contract
- Ask the insurer to remove the exclusion, which requires a request and confirmation the activity has ceased
Correct answer: D) Ask the insurer to remove the exclusion, which requires a request and confirmation the activity has ceased
Exclusions stay in the contract until removed. Insurers will usually delete an exclusion for an activity the insured has given up, sometimes with a questionnaire. The review's job is to align the contract with the client's current situation.
Why the other options are wrong
- AAn exclusion is a gap, even if currently unlikely to matter.
- BExclusions do not lapse by themselves.
- CCancelling loses coverage the client needs.
Exam tip
Exclusions for abandoned activities can often be removed on request; ask.
Common mistake
Leaving stale exclusions in force.
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.