LLQP Life Insurance · Component 1.2 · 35% of the exam
A client's group life coverage reduces sharply at a stated age and ends at retirement. In the review the agent should treat this as:
- Aa permanent resource that can be relied on throughout the client's retirement years
- Birrelevant, since the client will no longer have dependants by that age
- temporary coverage that leaves a gap precisely when individual coverage becomes costly
- Da reason to cancel any individual coverage the client currently holds
Correct answer: C) temporary coverage that leaves a gap precisely when individual coverage becomes costly
Group coverage often reduces and then ends, while final expenses, taxes at death and estate needs continue. Individual coverage put in place while the client is younger and healthier fills the gap.
Why the other options are wrong
- ACoverage that reduces and terminates is not a permanent resource.
- BEstate and final expense needs continue after dependants are grown.
- DIndividual coverage is what will remain after the group plan ends.
Exam tip
Group coverage shrinks and ends; individual coverage is what persists.
Common mistake
Counting group coverage as though it would last a lifetime.
What this tests
CISRO competency component 1.2 — 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.