LLQP Life Insurance · Component 3.2 · 25% of the exam
A client's main need is to provide for a spouse with a special-needs dependant for life. The category of insurance that fits is:
- ATen-year term, renewed as needed, since the premium is lowest and the client can convert later if the need turns out to be permanent
- BGroup life through the client's employer, since the coverage is inexpensive and requires no underwriting
- CAccidental death coverage, since it provides a large benefit at low cost for a family with modest means
- Permanent insurance, because the need does not expire with time
Correct answer: D) Permanent insurance, because the need does not expire with time
Lifetime support of a spouse or special-needs dependant is on the curriculum's list of needs met by life insurance, and it is permanent. Term coverage would expire or become unaffordable before the need ends.
Why the other options are wrong
- ATen-year term expires long before a lifetime need ends.
- BGroup life is uncontrolled and usually ends at retirement.
- CAccidental death covers only one cause of death.
Exam tip
Lifetime support of a spouse or special-needs dependant = permanent need = permanent insurance.
Common mistake
Recommending term for a need with no end date.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.