A 60-year-old business owner in Quebec needs a $1.5 million life insurance policy to fund a buy-sell agreement. Due to a history of well-managed Type 2 diabetes and controlled high blood pressure, the underwriter assigns a substandard rating, resulting in a 75% increase in the standard premium. What is the most appropriate action for the life insurance agent?

Question: A 60-year-old business owner in Quebec needs a $1.5 million life insurance policy to fund a buy-sell agreement. Due to a history of well-managed Type 2 diabetes and controlled high blood pressure, the underwriter assigns a substandard rating, resulting in a 75% increase in the standard premium. What is the most appropriate action for the life insurance agent?

Answer options:

• Recommend the client accept the offer as no other insurer will likely offer better terms.
• Advise the client to appeal the rating, providing more letters from their treating physician. ✅ Explain the reasons for the substandard rating, present the offer, and explore alternative solutions or carriers if available and suitable.
• Suggest the client apply to multiple other insurers simultaneously to find a better rate.

Correct answer: Explain the reasons for the substandard rating, present the offer, and explore alternative solutions or carriers if available and suitable.

Explanation: The agent must clearly explain the underwriting decision based on the client's health profile and the impact on premiums. Then, in accordance with CISRO Principles of Conduct, they should review options, which may include accepting the offer, exploring other carriers, or modifying coverage, ensuring the client understands the implications.