LLQP Life Insurance · Component 3.2 · 25% of the exam
A client's needs analysis shows a shortfall he cannot afford to close. In prioritizing, the agent should generally cover first:
- AThe education fund for the children, since the cost of post-secondary education is rising faster than inflation
- BEstate equalization among the children, since an unequal estate causes lasting family conflict
- CThe charitable bequest, since the client has made a commitment to the charity that the family will want to honour
- The survivors' income and immediate capital needs, the consequences that would be most severe if unfunded
Correct answer: D) The survivors' income and immediate capital needs, the consequences that would be most severe if unfunded
When budget forces choices, needs are ranked by severity: keeping the family housed and fed comes before bequests or equalization. Documenting the ranking supports later reviews as income rises.
Why the other options are wrong
- AEducation can be partly funded later; survival needs cannot wait.
- BEqualization is important but deferrable.
- CA bequest is discretionary.
Exam tip
Prioritize by severity: survival needs first, discretionary goals later.
Common mistake
Spreading a limited budget thinly across all needs.
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.