LLQP Life Insurance · Component 1.1 · 35% of the exam
A client mentions that her parents may soon need paid care. For her own situation this is relevant because:
- the commitment may compete for cash flow and reduce what she can afford in premiums
- Bshe will automatically inherit her parents' assets, which removes her need for coverage
- Cher parents' care costs are a liability of her estate that must be insured against
- Dinsurers charge higher premiums to clients who provide care for elderly relatives
Correct answer: A) the commitment may compete for cash flow and reduce what she can afford in premiums
Family commitments shape both what a client can spend and what the household depends on. If she contributes to care, her death would also remove that support, which the analysis should reflect.
Why the other options are wrong
- BAn expected inheritance is uncertain and should not offset a present need.
- CParents' care costs are not a liability of her estate.
- DCaregiving is not an underwriting factor affecting the premium.
Exam tip
Family commitments affect both affordability and what would be lost at death.
Common mistake
Ignoring support a client provides to people outside the household.
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.