LLQP Life Insurance · Component 3.1 · 25% of the exam
Basic amounts of group life insurance are issued without individual underwriting because:
- AEmployers guarantee the claims, so the insurer bears no risk on the basic amounts it issues
- BGroup members are always healthy, since they are actively at work when they join the plan
- CThe law prohibits underwriting groups, since individual medical questions would be discriminatory
- The group is underwritten as a whole, and coverage formulas limit anti-selection
Correct answer: D) The group is underwritten as a whole, and coverage formulas limit anti-selection
The curriculum states 'no underwriting required for basic and minimum amounts of group life insurance (underwriting only for additional coverage)'. Group characteristics, mandatory participation and salary-based formulas make individual evidence unnecessary up to the non-evidence maximum.
Why the other options are wrong
- AEmployers do not guarantee claims.
- BGroup members are not assumed healthy; the group's characteristics carry the risk.
- CLaw does not prohibit group underwriting; the group itself is underwritten.
Exam tip
Group underwriting looks at the group — size, industry, participation, experience — not at individuals below the non-evidence maximum.
Common mistake
Expecting medical questions for basic group life.
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.