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LLQP (life licence)

LifeLLQP Life Insurance✓A&SLLQP Accident & Sickness Insurance Seg FundsLLQP Segregated Funds & Annuities EthicsLLQP Ethics & Professional Practice (Common Law)

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Accident and Sickness · Components 3-4: recommendation and service (35%)

Underwriting, Taxation & Claims

How insurers assess A&S applicants, how premiums and benefits are taxed, and the statutory conditions that govern claims, renewals and changes during the life of the policy.

Customer service during the coverage2 min read5 sections

Must-know for the exam

Underwriting looks at occupation duties, income, health, avocations and existing coverage.
Outcomes: standard, rated (extra premium), issued with an exclusion rider, or declined.
Insurers cannot require a genetic test or its results (Genetic Non-Discrimination Act, upheld 2020 SCC 17).
Only written application answers can be used against the insured (Statutory Condition 2).
Claims: notice in 30 days, proof in 90, forms within 15 days, disability payments within 30 days then every 60.
A safer occupation lowers the rate with a refund; a riskier one limits benefits (Statutory Condition 3).
Insured's cancellation refund uses the short-rate table; insurer's cancellation refund is pro rata (Condition 4).
Reinstatement restarts the 2-year contestable period (BC s. 113).
Private health plan premiums qualify for the medical expense credit (ITA s. 118.2(2)(q)).

On this page · 5 sections

Traps that cost marks

Classifying risk by title alone.
Thinking medical underwriting alone sets the benefit.
Assuming any history means a decline.
Confusing a rating with a decline or reduction in benefit.
Thinking only occupation matters for risk.
Thinking oral remarks bind the applicant.
Delivering a policy while hiding a change in health.
Treating DI premiums as a medical expense.

Why it matters on the exam

Recommendation and service (35% together) questions put underwriting, tax and claim rules into client situations.

Underwriting

•Financial limits keep total disability benefits within a share of earned income.
•Specific conditions often get exclusion riders; general conditions like diabetes more often a rating.
•Hazardous avocations may be excluded or rated.

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Exam-style questions

Marcus, 38, a sales representative in Mississauga earning $60,000 a year, applies for an individual disability policy and asks for a $6,000 monthly benefit because he wants 'room to spare'. He has no other disability coverage and is in excellent health. What will financial underwriting most likely do?
Ella, 41, a physiotherapist in Kingston, applies for individual disability insurance. She discloses chronic lower back pain treated with physiotherapy and medication over the last 2 years, though she has never missed work because of it. The insurer is willing to cover her for disability from other causes. What is a common way to do so?
Jon, 47, an office manager in Regina, applies for an individual disability policy. His paramedical exam shows a high body mass index and elevated blood pressure, but no other problems. The insurer offers him the policy as applied for at 150% of the standard premium. What does this offer mean?

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