LLQP Life Insurance · Component 4.1 · 10% of the exam
A term policy is approaching the end of its term. The agent's review should present the client with:
- AOnly the renewal premium, since renewal is the only option that does not require new underwriting
- The options: renew at a higher premium, convert if the need is permanent, reapply if healthy, or lapse if the need has ended
- CNothing in particular, since renewal is automatic and unavoidable once the policy reaches the end of its term and the client keeps paying
- DA demand to renew, since the agent has a duty to keep the client covered whatever the client's wishes
Correct answer: B) The options: renew at a higher premium, convert if the need is permanent, reapply if healthy, or lapse if the need has ended
Renewal is one of four options and often not the cheapest for a healthy client, who may qualify for a new policy at a lower rate. For a client whose health has declined, renewal or conversion preserves coverage without evidence.
Why the other options are wrong
- AThe renewal premium is only one of several options.
- CRenewal is not unavoidable; there are alternatives.
- DThe agent cannot demand renewal.
Exam tip
At term end: renew, convert, re-apply, or lapse. Healthy clients often get a better rate re-applying; unhealthy clients rely on renewal or conversion.
Common mistake
Letting a healthy client renew at the age-banded rate without checking new-business rates.
What this tests
CISRO competency component 4.1 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.