LLQP (Life Licence Qualification Program) Practice Exam · Question
When an agent encourages a client to replace an existing life insurance policy with a new one, what is their primary professional obligation?
Replacement of a policy is not illegal, but it is highly regulated. The agent must provide a full comparison of the old and new policies (often using a LIRD - L
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Question: When an agent encourages a client to replace an existing life insurance policy with a new one, what is their primary professional obligation?
Answer options:
- Cancel the existing policy immediately before the new one is approved.
- Avoid mentioning the existing policy to the new insurer to speed up the process.
- Only provide information on the benefits of the new policy to avoid confusion. ✅ Provide a written comparison of the two policies and explain the potential disadvantages of the replacement.
Correct answer: Provide a written comparison of the two policies and explain the potential disadvantages of the replacement.
Explanation: Replacement of a policy is not illegal, but it is highly regulated. The agent must provide a full comparison of the old and new policies (often using a LIRD - Life Insurance Replacement Declaration) to ensure the client can make an informed decision.
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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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