LLQP Life Insurance · Component 3.2 · 25% of the exam
An agent notices that one insurer's illustration projects far better long-term values than its competitors. The agent should:
- Aassume the projection is an error and exclude that insurer from consideration
- Brecommend that insurer, since the illustration demonstrates superior performance
- Cpresent only that one illustration, so the client is not confused by the comparison
- compare the guaranteed elements and the assumptions, since projections are not promises
Correct answer: D) compare the guaranteed elements and the assumptions, since projections are not promises
Differences often reflect more optimistic assumptions rather than better products. Comparing guaranteed columns, current scales and the insurer's strength gives a fairer picture than the projected totals.
Why the other options are wrong
- AA difference in assumptions is not an error to be dismissed.
- BA favourable projection is not evidence of future performance.
- CWithholding comparisons deprives the client of the basis to choose.
Exam tip
Compare guaranteed columns and assumptions, never projected totals.
Common mistake
Selecting an insurer on the strength of its projected values.
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.