LLQP Life Insurance · Component 3.3 · 25% of the exam
If the insurer issues the policy on terms different from those applied for (for example, with a rating), what must happen before the policy is in force?
- AThe regulator must approve the amended terms, since a rating changes the contract from what was filed
- BThe agent must approve the amendment on the client's behalf, since the agent represents the client's interests
- The applicant must accept the amended offer, usually by signing an amendment and paying any extra premium
- DNothing further, since the policy is in force automatically once the insurer has issued it
Correct answer: C) The applicant must accept the amended offer, usually by signing an amendment and paying any extra premium
A policy issued 'other than as applied for' is a counter-offer. The contract forms only when the client accepts it. The agent must explain the change clearly rather than simply delivering the policy.
Why the other options are wrong
- ARegulators do not approve individual policies.
- BThe agent cannot accept on the client's behalf.
- DA policy issued other than as applied for is a counter-offer.
Exam tip
Rated or amended issue = counter-offer. The contract forms when the client accepts and pays any additional premium.
Common mistake
Delivering an amended policy without explaining the change and obtaining acceptance.
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:
- 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.