LLQP Life Insurance · Component 3.1 · 25% of the exam
Which statement about the temporary insurance agreement's amount limit is correct?
- AIt equals the full amount applied for in every case, since the insurer has accepted the first premium for the coverage requested
- BIt is unlimited, since the insurer has agreed to cover the applicant until the underwriting decision is made
- It is capped at a stated maximum, often below the amount applied for, with eligibility conditions
- DIt is set by the agent, who decides how much temporary coverage the applicant needs while the application is processed
Correct answer: C) It is capped at a stated maximum, often below the amount applied for, with eligibility conditions
TIAs have conditions: a maximum amount, age limits, and eligibility answers. A client applying for a large amount is only partly covered during underwriting. The agent should say so.
Why the other options are wrong
- ATIA coverage is capped.
- BNo temporary insurance agreement is unlimited in amount.
- DThe insurer sets TIA terms.
Exam tip
TIA covers up to its cap, only if eligibility questions are clean. Read the TIA form with the client.
Common mistake
Telling a client the whole amount is in force from the day of application.
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.