LLQP Life Insurance · Component 1.1 · 35% of the exam
A client mentions that his employer could terminate the group plan at any time. Why is this relevant to his personal coverage?
- AIt means the client should cancel his individual policy, since the group plan will cover him for as long as it lasts
- BIt only matters for disability coverage, since group life benefits are guaranteed even if the plan is terminated
- CIt is not relevant, since provincial law guarantees that group coverage continues until the member retires
- Group coverage is outside the client's control and may end with the plan or his job, so relying on it alone is risky
Correct answer: D) Group coverage is outside the client's control and may end with the plan or his job, so relying on it alone is risky
Group life belongs to the plan sponsor. The employer can amend or terminate it without the member's consent, and coverage ends when employment ends (subject to a conversion privilege). A needs analysis treats group coverage as valuable but not permanent.
Why the other options are wrong
- AThe risk of losing group coverage is a reason to keep individual coverage.
- BThe vulnerability of group plans applies to life coverage as much as disability.
- CGroup coverage is not guaranteed by law; the sponsor controls the plan.
Exam tip
Group life belongs to the employer. Treat it as a bonus, not the foundation of a family's protection.
Common mistake
Counting group life as permanent coverage in the needs analysis.
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.