LLQP (Life Licence Qualification Program) Practice Exam · Question
What is the term used when a client is encouraged to cancel an existing life insurance policy to purchase a new one?
Replacement is the act of cancelling an existing policy to purchase a new one. While not illegal, it is heavily regulated. The agent must complete a Life Insura
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Question: What is the term used when a client is encouraged to cancel an existing life insurance policy to purchase a new one?
Answer options:
- Reinstatement ✅ Replacement
- Rescission
- Re-titling
Correct answer: Replacement
Explanation: Replacement is the act of cancelling an existing policy to purchase a new one. While not illegal, it is heavily regulated. The agent must complete a Life Insurance Replacement Declaration (LIRD) or a similar disclosure document to compare the two policies and ensure the replacement is in the client's best interest.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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