LLQP Life Insurance · Component 4.1 · 10% of the exam
After a policy is reinstated, the contestability period:
- AIs extended to ten years, since the insurer has taken on a risk that lapsed and needs longer to investigate the client's history
- BNever restarts, since the original two-year period ran from issue and the reinstatement continues the same contract
- Generally restarts for statements made in the reinstatement application, for a further two years
- DIs waived on reinstatement, since the insurer has already had the opportunity to contest the original application
Correct answer: C) Generally restarts for statements made in the reinstatement application, for a further two years
Reinstatement is a fresh underwriting event. The insurer relies on the reinstatement application and can contest it within the new period. The original application's contestability, if expired, stays expired.
Why the other options are wrong
- AThe period remains two years.
- BA new contestability period applies to the reinstatement statements.
- DContestability is not waived on reinstatement.
Exam tip
Reinstatement restarts contestability for the reinstatement application.
Common mistake
Telling a client that an old policy's contestability is permanently over after reinstatement.
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
- 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:
- The primary purpose of a periodic policy review is to:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.