LLQP Life Insurance · Component 1.3 · 35% of the exam
A client's circumstances have been stable for several years and he asks how often the analysis needs redoing. The agent should explain that a review is warranted:
- Aonly when the insurer writes to request an updated client profile
- Bonly when the client decides he wants to buy additional coverage
- on a regular cycle and whenever a major life or financial event occurs
- Devery ten years, since that is how long a set of assumptions remains valid
Correct answer: C) on a regular cycle and whenever a major life or financial event occurs
Stability is itself worth confirming, and a regular review catches changes the client may not think to mention. Births, deaths, marriage, separation, a new job, a new debt or a business change should each trigger one.
Why the other options are wrong
- AThe obligation belongs to the agent, not to the insurer.
- BReviews exist to identify needs, not only to place new business.
- DA decade is far too long between reviews.
Exam tip
Review on a cycle and on every major life event.
Common mistake
Reviewing only when the client initiates the conversation.
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.