LLQP Life Insurance · Component 1.1 · 35% of the exam
A client holds a work permit expiring in two years and hopes to obtain permanent residence. The agent should:
- Aadvise waiting until permanent residence is granted before buying any coverage
- record the status, since it affects underwriting, benefit entitlement and future plans
- Cdecline the application, since temporary residents may not purchase Canadian coverage
- Dassume permanent residence will be granted and plan on that basis alone
Correct answer: B) record the status, since it affects underwriting, benefit entitlement and future plans
Residence status affects the insurer's assessment, the government benefits a family could claim and where the client may be living in future. It also argues for coverage that continues if he moves.
Why the other options are wrong
- AWaiting risks a change in health and leaves the family exposed.
- CTemporary residents can and do purchase coverage in Canada.
- DPlanning on an assumption that may not hold is poor practice.
Exam tip
Residence status shapes underwriting, benefits and the design of coverage.
Common mistake
Either refusing the business or ignoring the status entirely.
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.