LLQP Life Insurance · Component 1.1 · 35% of the exam
A client's occupation is commercial diving. How does this affect the needs analysis and the recommendation?
- AIt has no effect, since occupation is recorded for identification and does not enter the insurer's pricing
- BIt disqualifies the client from any life insurance, since commercial diving is an uninsurable occupation
- It is a hazard the insurer will underwrite, possibly with a rating or exclusion, and the agent should plan for that
- DIt raises the financial impact of death for the dependants only, without affecting the cost or availability of coverage
Correct answer: C) It is a hazard the insurer will underwrite, possibly with a rating or exclusion, and the agent should plan for that
Hazardous occupations are rated by underwriters. The agent should anticipate an extra premium, an exclusion or, rarely, a decline, and set the client's expectations. It does not change the amount of need, only what coverage will cost or be available.
Why the other options are wrong
- AA hazardous occupation is a rating factor and will be underwritten.
- BHazardous occupations are usually insurable with a rating or exclusion.
- DThe occupation changes cost and availability, not the family's financial need.
Exam tip
Set expectations early for clients in hazardous occupations: the need is the same, but the offer may carry an extra premium or an exclusion.
Common mistake
Promising standard rates before underwriting has looked at the occupation.
What this tests
CISRO competency component 1.1 — 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.