LLQP Life Insurance · Component 3.2 · 25% of the exam
During the recommendation, the client asks whether she can change her mind after buying. The agent should explain that:
- AShe must keep the policy for ten years, since the insurer's acquisition costs are recovered over that period of the contract
- BLife insurance cannot be cancelled once issued, since the insurer has accepted the risk for the insured's lifetime
- COnly the insurer can cancel the policy, since the client's only option is to stop paying and let it lapse
- She can cancel within the free-look period for a full refund, and terminate at any later time
Correct answer: D) She can cancel within the free-look period for a full refund, and terminate at any later time
Clients should know both the free-look right and the longer-term realities of termination. Informed clients make better decisions and complain less.
Why the other options are wrong
- ANo minimum holding period exists.
- BPolicies can be cancelled by the policyholder.
- CThe policyholder controls termination.
Exam tip
Explain the free look and the consequences of later surrender before the sale.
Common mistake
Omitting the free-look right from the recommendation conversation.
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.