LLQP Life Insurance · Component 3.1 · 25% of the exam
A temporary flat extra premium is typically used when:
- The added risk is expected to diminish over time, so the extra is charged for a limited period
- BThe policy is group insurance and the sponsor has agreed to pay a temporary surcharge for a member who presents a higher risk
- CThe applicant is over 70, since older applicants are charged an extra premium during the first years of the policy
- DThe applicant is a smoker who has stated an intention to quit, so the extra is removed once the habit ends
Correct answer: A) The added risk is expected to diminish over time, so the extra is charged for a limited period
Some risks are front-loaded: recurrence risk after certain treatments declines with time. A temporary extra matches the premium to that profile and falls away automatically.
Why the other options are wrong
- BGroup insurance is not individually rated this way.
- CAge is priced in the base rate.
- DSmoking is priced through the smoker class.
Exam tip
Temporary extras end on schedule; note the date in the client's file.
Common mistake
Not telling the client that a temporary extra will stop.
What this tests
CISRO competency component 3.1 — 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.