LLQP Life Insurance · Component 1.1 · 35% of the exam
A client earns far less than her spouse and asks whether she needs coverage at all. The agent should explain that:
- Aonly the higher earner in a household ever needs life insurance coverage
- Bshe should insure her spouse instead and name herself as the beneficiary of that policy
- her contribution, including unpaid work and her share of debts, still supports the household
- Dcoverage on the lower earner is never economical because the premium exceeds the benefit
Correct answer: C) her contribution, including unpaid work and her share of debts, still supports the household
The question is what disappears if she dies. Her income, her share of joint obligations and any unpaid work all have to be replaced or paid for, even if her salary is the smaller of the two.
Why the other options are wrong
- ABoth partners' contributions matter to a household's finances.
- BInsuring the spouse does not address what her own death would cost.
- DCoverage on a lower earner is routinely economical and appropriate.
Exam tip
Ask what disappears at death, not who earns more.
Common mistake
Skipping the lower earner's analysis because the income is smaller.
What this tests
CISRO competency component 1.1 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.