LLQP Life Insurance · Component 1.2 · 35% of the exam
A client has an accidental death rider on his policy. In assessing his coverage, the agent should treat the rider amount as:
- Coverage that pays only if death is accidental, so it cannot be relied on to meet general needs
- BWorthless for planning purposes, since accidental deaths are so rare that the rider will almost never pay
- CCoverage that pays double for death from illness as well as accident, since the rider doubles the base amount
- DEqual to a base death benefit, since the rider pays the same amount whatever the cause of death
Correct answer: A) Coverage that pays only if death is accidental, so it cannot be relied on to meet general needs
Accidental death benefits pay only when death results from an accident, which is a minority of deaths. Counting the rider as if it were base coverage overstates the family's protection. It is a supplement, not a foundation.
Why the other options are wrong
- BThe rider has value for accidental deaths; it is limited, not worthless.
- CAccidental death riders never pay for illness.
- DAn accidental death rider pays only for accidents.
Exam tip
Count accidental death coverage separately and never as a substitute for base coverage in the needs analysis.
Common mistake
Adding the AD rider amount to total protection as if it were unconditional.
What this tests
CISRO competency component 1.2 — 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.