LLQP Life Insurance · Component 1.1 · 35% of the exam
A client mentions that her spouse has a serious chronic illness. For the needs analysis this matters because:
- Athe insurer will decline the client's own application on the basis of the spouse's health
- the survivor may face higher costs and reduced earning capacity if the client dies
- Cthe spouse's condition has no bearing on the coverage the client herself requires
- Dthe client should be encouraged to buy coverage on the spouse before anything else
Correct answer: B) the survivor may face higher costs and reduced earning capacity if the client dies
A survivor who is unwell may be unable to return to full-time work and may face ongoing medical and care costs. The analysis should reflect a longer income need and a larger reserve than it otherwise would.
Why the other options are wrong
- AA spouse's health does not determine the client's own insurability.
- CThe survivor's circumstances shape the amount and duration of the need.
- DThe client's own need is what the analysis is addressing here.
Exam tip
A survivor's health changes both the length and the size of the income need.
Common mistake
Recording the client's health and never asking about the survivor's.
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.