LLQP Exam Dumps : Life License Qualification Program (LLQP)

Comprehensive and Detailed In-Depth Explanation: Under the Distribution Act (Sections 16–18), insurance representatives like Pierre have a duty to act in the client’s best interest by providing clear, accurate information about products, including coverage and exclusions. This aligns with the LLQP’s emphasis on needs-based advising and the Civil Code’s requirement of good faith (Article 1375). Option A correctly outlines Pierre’s responsibility to explain products and exclusions, ensuring Carole makes an informed decision. Option B (handing over brochures without explanation) fails to meet the proactive advisory role mandated by the Ethics and Professional Practice manual, risking misunderstanding. Option C (conference call) is impractical and shifts Pierre’s duty to the insurer. Option D (written questions to the insurer) similarly avoids Pierre’s obligation to directly assist Carole. The manual stresses full disclosure and client education, making A the ethical and legal standard.

In this scenario, the policy was accepted and delivered to Cassie by Mason before her biopsy, indicating that she was considered insurable at the time of application. However, the insurance policy is subject to a two-year contestability period, during which the insurer can investigate the claim if they believe relevant information regarding the insured’s health was omitted or misrepresented.

According to LLQP guidelines, insurance contracts are built on the principle of utmost good faith, requiring that both the client and the representative disclose all material facts that may affect the insurance risk. If the insured's health status changes significantly between the application and delivery of the policy, it is the representative's duty to inform the insurer to reassess the risk​​.

In this case, Mason, as the insurance representative, failed to disclose Cassie’s new health condition, which is considered a material change to her insurability. Under LLQP ethics and practice standards, non-disclosure of this change can result in the insurer denying the claim, as it affected the underwriting decision​​.

Therefore, due to the lack of disclosure by Mason, the insurance company would have grounds to deny the claim based on this material change in insurability, aligning with LLQP provisions and insurance contract law.

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Disability insurance policies generally include a grace period of at least 30 days from the premium due date, during which the policyholder can make a late payment without losing coverage. This grace period ensures that minor payment delays do not immediately result in policy cancellation​. Therefore, Melissa’s policy would remain active and would only be subject to cancellation if she fails to pay within 30 days of the missed premium deadline.

Notices of termination are issued only after the grace period has lapsed, giving the policyholder additional time to remedy any missed payments​.