LLQP Life Insurance · Component 1.2 · 35% of the exam
A client holds a joint first-to-die policy with her spouse. They are divorcing. The review should raise that:
- AThe policy is automatically cancelled by divorce, so each spouse must apply for new coverage as soon as the decree is issued
- The joint policy pays on the first death of either spouse, so the couple may want to split it or exercise a survivor option
- CThe policy converts to term on each life at the date of separation, so no further action is needed by either spouse
- DNothing changes, since a joint policy is a contract with the insurer that is unaffected by the relationship between the insureds
Correct answer: B) The joint policy pays on the first death of either spouse, so the couple may want to split it or exercise a survivor option
Joint policies do not respond to divorce on their own. Two people who no longer share finances usually do not want a single policy paying on the first death. Many contracts allow splitting into two single-life policies without evidence within a window.
Why the other options are wrong
- ADivorce does not cancel contracts.
- CThere is no automatic conversion.
- DA joint policy between divorcing spouses needs attention.
Exam tip
Joint policies and divorce: check the contract for a split option and its deadline.
Common mistake
Leaving a joint first-to-die policy in place after the marriage ends.
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.