LLQP Life Insurance · Component 3.2 · 25% of the exam
An agent recommends a product that costs more than an equivalent alternative. The file should show:
- Aa signed statement from the client accepting that a cheaper alternative was available
- the alternatives considered and the reasons the recommended product was preferred
- Cnothing beyond the illustration for the product that was finally recommended
- Dthe commission payable on each of the products the agent compared
Correct answer: B) the alternatives considered and the reasons the recommended product was preferred
A higher cost can be entirely justified by guarantees, conversion rights, riders or the insurer's underwriting. What matters is that the reasoning was client-focused and recorded at the time.
Why the other options are wrong
- AAn acknowledgement does not replace the agent's own reasoning.
- COne illustration does not show why the choice was made.
- DCommission figures do not justify the recommendation to the client.
Exam tip
Record the alternatives and why the chosen product was better for the client.
Common mistake
Keeping only the winning illustration in the file.
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.