LLQP Life Insurance · Component 3.2 · 25% of the exam
An agent concludes that replacing a client's existing policy would genuinely benefit her. The recommendation must:
- set out a written comparison of both contracts and their costs before any decision
- Bproceed once the new policy has been issued and the old one cancelled
- Crely on the client's own recollection of what her existing policy provides
- Davoid mentioning the existing policy at all, so that the comparison remains straightforward
Correct answer: A) set out a written comparison of both contracts and their costs before any decision
Replacement disclosure requires a comparison of coverage, premiums, values, guarantees and new contestability and suicide periods. Existing coverage must remain in force until the new policy is issued and delivered.
Why the other options are wrong
- BThe comparison must precede the decision, not follow it.
- CThe comparison must use the actual contract, not a recollection.
- DConcealing the existing policy is the opposite of the requirement.
Exam tip
Written comparison first, and never cancel before the new policy is in force.
Common mistake
Cancelling existing coverage before the replacement is actually issued.
What this tests
CISRO competency component 3.2 — 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.