LLQP Life Insurance · Component 3.1 · 25% of the exam
An applicant is awaiting the results of tests ordered after an abnormal finding. The underwriter is most likely to:
- Aissue with a permanent flat extra premium to reflect the uncertainty involved
- Bissue the policy at standard rates and review the results at a later date
- Cdecline the application permanently on the basis of the abnormal finding
- postpone the decision until the investigation is complete
Correct answer: D) postpone the decision until the investigation is complete
A postponement defers the decision rather than refusing it. Once the investigation concludes, the insurer can assess the actual risk, which may result in standard terms, a rating or a decline.
Why the other options are wrong
- APricing an unknown result with an extra premium is not how it works.
- BAn insurer will not price a risk it cannot yet assess.
- CA postponement is not a decline; the outcome remains open.
Exam tip
Pending investigations mean postponement, not decline.
Common mistake
Telling a client an application was refused when it was only postponed.
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.