LLQP Life Insurance · Component 1.2 · 35% of the exam
A client holds a policy issued in a foreign currency from a previous country of residence. In the review the agent should note that:
- the amount available to survivors will vary with the exchange rate at the time of the claim
- Bthe insurer must reissue the contract in Canadian dollars once the client relocates
- Ca foreign policy provides no benefit to a family resident in Canada
- Dthe benefit converts automatically into Canadian dollars at the date of issue
Correct answer: A) the amount available to survivors will vary with the exchange rate at the time of the claim
A benefit denominated abroad buys a variable amount in Canadian dollars. The coverage still counts, but the analysis should treat its value cautiously and note the currency in the file.
Why the other options are wrong
- BInsurers do not reissue contracts in a new currency on relocation.
- CA foreign policy can still pay a valid benefit to the family.
- DNo conversion is fixed at the date of issue.
Exam tip
Foreign currency coverage counts, but its value in dollars is uncertain.
Common mistake
Converting a foreign benefit at today's rate and treating it as fixed.
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.