Texas Life Agent Practice Exam

If an existing client wants to buy another life insurance policy, what should the producer do?

1. Complete the application on their behalf

2. Collect the premium before application

3. Have the customer come in to complete a new application

4. Modify the existing application for the new policy

The correct answer is: Have the customer come in to complete a new application

When an existing client expresses the desire to purchase an additional life insurance policy, having the customer complete a new application is the appropriate approach. This ensures that all relevant information is accurately captured and reflects the current status of the client's health, financial needs, and any changes in their personal circumstances. Completing a new application provides the insurance company with the necessary data to underwrite the policy effectively. It allows for any updates regarding the client’s personal history, lifestyle changes, and the specific types of coverage they are seeking. It also helps maintain compliance with underwriting standards and regulatory requirements, ensuring that the policy is suited to the individual's current situation. While it might seem efficient to complete the application on their behalf or modify an existing application, doing so could lead to inaccuracies or overlook important details that have changed since the last policy was issued. Collecting a premium before the application could be viewed as premature, as the buyer must first complete the application and receive underwriting approval before making any payment. Therefore, facilitating the client’s completion of a new application is the best course of action to protect both the client’s interests and the integrity of the insurance process.