LLQP Life Insurance · Component 3.3 · 25% of the exam
An agent collects the first premium with the application and gives the client a temporary insurance agreement. The client must be told that it:
- Acan be extended on request whenever underwriting takes longer than was expected
- Bcontinues until the client decides whether to accept the policy when issued
- Cprovides the full amount applied for from the moment the application is signed
- provides limited conditional coverage, subject to the declarations being accurate
Correct answer: D) provides limited conditional coverage, subject to the declarations being accurate
Temporary coverage is capped and conditional, and it ends when the policy is issued, declined or after a stated period. A client who believes the full amount is in force may be badly misled.
Why the other options are wrong
- AThe period is fixed and is not extended on request.
- BIt ends on its own terms rather than awaiting the client's decision.
- CThe agreement is capped well below most amounts applied for.
Exam tip
Temporary coverage is capped, conditional and time limited.
Common mistake
Describing a temporary agreement as full coverage from day one.
What this tests
CISRO competency component 3.3 — 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.