LLQP Life Insurance · Component 3.3 · 25% of the exam
An agent implementing a replacement must ensure the replacement declaration is:
- Acompleted only if the existing policy is actually cancelled by the client
- given to the client and sent to both the replacing and the replaced insurer
- Ckept in the agent's own file in case a question arises about the transaction later
- Dsigned by the existing insurer before the new application is submitted
Correct answer: B) given to the client and sent to both the replacing and the replaced insurer
The replaced insurer receives notice so it can contact the client, and the client keeps a copy of the comparison. Failing to complete and distribute the declaration is a breach regardless of whether the replacement benefited the client.
Why the other options are wrong
- AThe obligation arises when a replacement is contemplated.
- CThe declaration must be distributed, not merely retained.
- DThe existing insurer receives notice rather than giving consent.
Exam tip
The replacement declaration goes to the client and to both insurers.
Common mistake
Completing the form but never sending it to the replaced insurer.
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.