LLQP Life Insurance · Component 1.1 · 35% of the exam
A client mentions she is a member of a group RRSP at work. For the life insurance needs analysis, this is relevant because:
- The RRSP is an asset for survivors and a potential tax liability at death, affecting resources and capital needs
- BRRSPs are a form of life insurance, since the balance is paid to the named beneficiary at death
- CIt is irrelevant to death planning, since an RRSP is a retirement vehicle rather than a protection product
- DIt replaces the need for coverage, since the accumulated balance will support the family after death for as long as they need it
Correct answer: A) The RRSP is an asset for survivors and a potential tax liability at death, affecting resources and capital needs
Registered assets count twice: as a resource for survivors and, unless rolled to a spouse, as taxable income on the final return. Both sides belong in the analysis of assets and tax exposure.
Why the other options are wrong
- BAn RRSP is a savings plan, not life insurance.
- CRegistered assets are highly relevant because of their tax treatment.
- DAn RRSP does not replace the need for coverage; it is one resource.
Exam tip
Registered plans: a resource for survivors and a tax liability at death unless rolled to a spouse. Count both sides.
Common mistake
Counting the RRSP's full value as available to survivors without the tax.
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.