LLQP Life Insurance · Component 1.3 · 35% of the exam
A client's analysis counts group life coverage that ends when he changes employer. The correct treatment is to:
- Acount it in full, since he is employed today and the coverage is currently in force
- Bdouble the group amount, since employers usually improve benefits over time
- Cexclude every group benefit from the analysis as a matter of principle
- note it but recognize that a need dependent on employment is not securely covered
Correct answer: D) note it but recognize that a need dependent on employment is not securely covered
Coverage that disappears with a job change is not a reliable answer to a long-term need. The analysis should show the exposure that would remain, which is often what justifies individual coverage.
Why the other options are wrong
- ACounting it in full hides the exposure a job change would create.
- BAssuming benefits improve has no basis in the analysis.
- CGroup coverage is a genuine resource and should be recorded.
Exam tip
Show what remains if the group coverage disappears.
Common mistake
Netting group coverage against a permanent need without qualification.
What this tests
CISRO competency component 1.3 — 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.