LLQP Life Insurance · Component 3.1 · 25% of the exam
An applicant has applications pending with two other insurers and asks whether he must mention them. The agent should explain that:
- pending and in-force coverage must be disclosed, as insurers share information
- Bother applications are entirely confidential and need not be disclosed to any insurer at all
- Cdisclosure is required only if the other applications are eventually approved
- Dthe question applies only where the total amount exceeds a stated threshold
Correct answer: A) pending and in-force coverage must be disclosed, as insurers share information
Insurers ask about other coverage to assess whether the total is justified by the need. Information is exchanged through the industry bureau, so an omission is likely to be discovered and treated as a misrepresentation.
Why the other options are wrong
- BThe application asks the question and requires a truthful answer.
- CThe question covers applications pending as well as coverage in force.
- DThe disclosure requirement is not limited by an amount.
Exam tip
Pending applications elsewhere are a disclosure item, not a private matter.
Common mistake
Leaving out other pending applications to avoid slowing the underwriting.
What this tests
CISRO competency component 3.1 — 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.