LLQP Life Insurance · Component 3.3 · 25% of the exam
Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
- Failure to satisfy identity verification or AML requirements, or an inability to establish insurable interest
- BThe applicant's province of residence, since some insurers do not issue policies in every province
- CThe agent's request to hold the policy, since the insurer cannot issue a contract the agent is not ready to deliver
- DThe beneficiary's name, since the insurer may refuse to issue a policy payable to a person it considers unsuitable
Correct answer: A) Failure to satisfy identity verification or AML requirements, or an inability to establish insurable interest
Issue depends on more than health: identity, source of funds where applicable, and insurable interest are prerequisites. These are part of implementation requirements.
Why the other options are wrong
- BProvince affects licensing, not issuance of a compliant application.
- CAgents do not control issue.
- DA beneficiary's name is not grounds for refusal.
Exam tip
Implementation requirements include identity verification and insurable interest, not only medical approval.
Common mistake
Forgetting identity verification documents at application.
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:
- 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.