LLQP Life Insurance · Component 1.3 · 35% of the exam
A client's needs analysis produces a shortfall roughly equal to the coverage under her group plan. Her group plan is her only coverage. The correct interpretation is:
- She has a shortfall of that amount, because the group coverage was already counted as a resource
- BShe has double the coverage she needs, since the group plan matches the shortfall and the analysis counted it as well
- CShe is fully covered, since the group plan's amount equals the shortfall and the two cancel each other out
- DThe analysis must be redone, since a shortfall that equals the group coverage indicates a calculation error
Correct answer: A) She has a shortfall of that amount, because the group coverage was already counted as a resource
Resources are subtracted before the shortfall is stated. The group coverage has already been credited; the remaining shortfall is additional coverage needed. Counting the group plan again would double-count it.
Why the other options are wrong
- BNothing has been double counted; the shortfall is real.
- CThe shortfall is what remains after group coverage was counted.
- DThe analysis is consistent as it stands.
Exam tip
Once a resource is subtracted, do not credit it again when reading the shortfall.
Common mistake
Offsetting the shortfall with coverage that was already in the resources column.
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.