LLQP Life Insurance · Component 3.3 · 25% of the exam
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:
- ADeliver the personal policy and change ownership later, since the client can assign it to the corporation at any time
- Amend the application before issue so the owner, payor and beneficiary are correct from the start, avoiding a later transfer
- CHave the corporation sign the delivery receipt for a personal policy, so the insurer's records show the corporation's involvement
- DIgnore the request, since the application was signed personally and the insurer will issue on the terms applied for
Correct answer: B) Amend the application before issue so the owner, payor and beneficiary are correct from the start, avoiding a later transfer
Ownership set at issue avoids a disposition later. Amending before issue is simple; transferring afterwards raises policy-gain and shareholder-benefit questions.
Why the other options are wrong
- AA later transfer is a disposition with tax consequences.
- CMismatched documents create confusion and legal risk.
- DThe client's structure must be honoured.
Exam tip
Get the owner right before issue; changing it after is a taxable event.
Common mistake
Issuing personally and 'fixing' ownership afterwards.
What this tests
CISRO competency component 3.3 — 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:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
- A client's application shows the beneficiary as 'my wife' without a name. The best implementation practice is to:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.