LLQP Life Insurance · Component 3.2 · 25% of the exam
A client's spouse has no income and no insurance. The needs analysis for the household should:
- ALeave the spouse out of the analysis, since a spouse with no income has no financial value to replace
- BInsure the spouse for the same amount as the earner, since the household's total need is the same whichever spouse dies
- CCover only the earner, since the family's financial security depends entirely on the earner's income
- Quantify the cost of replacing the non-earner's contributions, such as childcare, and recommend coverage on that spouse
Correct answer: D) Quantify the cost of replacing the non-earner's contributions, such as childcare, and recommend coverage on that spouse
The non-earning spouse's death imposes real costs on the household. The amount is based on replacement cost, usually smaller than the earner's coverage but not zero.
Why the other options are wrong
- AIgnoring the spouse leaves a gap.
- BEqual amounts ignore the different economic roles.
- CThe non-earner's death also creates needs.
Exam tip
Insure both spouses, sized to each one's economic contribution.
Common mistake
Insuring only the earner in a single-income household.
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.