LLQP Life Insurance · Component 3.2 · 25% of the exam
A client is choosing between a participating whole life policy and a universal life policy with a guaranteed account. She values simplicity and dislikes making financial decisions. The suitable recommendation is:
- AGroup life through her employer, since the plan requires no decisions and the employer manages everything
- Participating whole life, where the insurer manages the investments and the policy requires no ongoing decisions
- CUniversal life with equity accounts, since the higher long-run returns will make up for her lack of interest in managing them
- DYearly renewable term, since the premium is set each year by the insurer and she never has to decide anything
Correct answer: B) Participating whole life, where the insurer manages the investments and the policy requires no ongoing decisions
Product fit includes the client's temperament. A client who does not want to manage anything is better served by a bundled, insurer-managed product than by one that depends on her choices.
Why the other options are wrong
- AGroup life is not a personal permanent plan.
- CEquity-linked UL demands the decisions she wants to avoid.
- DYRT is not permanent and requires attention at every renewal.
Exam tip
Match the product's demands on the client to what the client will actually do.
Common mistake
Recommending UL to a client who will never review it.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.