LLQP Life Insurance · Component 3.3 · 25% of the exam
When setting up a pre-authorized debit for premiums, the agent should:
- obtain the client's authorization with verified account details and confirm the withdrawal date
- Bset the amount slightly higher than the premium to allow for future increases
- Carrange the first withdrawal for a date falling after the policy's grace period expires
- Duse the account details from another policy the client holds with the insurer
Correct answer: A) obtain the client's authorization with verified account details and confirm the withdrawal date
An incorrect account number or an unexpected withdrawal date leads to a returned payment and a lapse risk. A signed authorization with verified details and an agreed date avoids the problem entirely.
Why the other options are wrong
- BWithdrawing more than authorized would breach the authorization.
- CPayments are arranged to keep the policy in force, not after a grace period.
- DDetails must be confirmed for this authorization rather than assumed.
Exam tip
Verify the account details and the date; returned payments cause lapses.
Common mistake
Copying banking details from another policy without confirming them.
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.