LLQP Life Insurance · Component 3.1 · 25% of the exam
Which of the following is generally a factor that increases life insurance premium rates?
- A history of tobacco use within the period the insurer's non-smoker definition requires
- BHaving children, since a parent's death causes the insurer a larger financial loss
- CBeing female, since women live longer and therefore pay premiums for more years
- DBeing married, since married applicants tend to buy larger amounts of coverage and the insurer prices the larger exposure
Correct answer: A) A history of tobacco use within the period the insurer's non-smoker definition requires
Smoking materially raises mortality and is one of the most important rating factors; most insurers price smoker and non-smoker classes separately. Age, health, gender, occupation, family history and lifestyle are the curriculum's list of client-level factors.
Why the other options are wrong
- BHaving children affects need, not rates.
- CFemale mortality is lower; being female does not increase rates.
- DMarital status is not a rating factor.
Exam tip
Rating factors: age, health, gender, tobacco, occupation, family history, lifestyle. Smoking is among the largest.
Common mistake
Confusing needs-analysis facts with underwriting factors.
What this tests
CISRO competency component 3.1 — 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.