LLQP Life Insurance · Component 4.2 · 10% of the exam
A beneficiary receiving a large death benefit asks whether she must decide immediately how to use it. The agent should:
- Arecommend an immediate investment so the money starts earning without delay
- explain that the funds can be held safely while she takes time to decide
- Ctell her the insurer requires an investment instruction within thirty days of payment
- Drecommend an annuity purchase at once so the decision need not be revisited
Correct answer: B) explain that the funds can be held safely while she takes time to decide
Decisions taken in the first weeks of bereavement are often regretted. A short-term holding preserves every option, and the wider planning conversation can follow when she is ready.
Why the other options are wrong
- AUrgency to invest serves nobody in the immediate aftermath of a death.
- CNo such instruction deadline is imposed by the insurer.
- DAn irrevocable annuity is the worst choice while circumstances are unsettled.
Exam tip
After a death, protect optionality first and plan later.
Common mistake
Converting a death benefit into a long-term product straight away.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.