LLQP Life Insurance · Component 1.1 · 35% of the exam
A client says she has 'plenty of insurance through work' and declines a needs analysis. The most professional response is to:
- ATell her group insurance is worthless, since employers can cancel it at any time and the amounts are small
- BSell her a policy anyway, since the agent's professional judgment is that everyone needs individual coverage
- Explain that group coverage is usually a salary multiple that may end with the job, and offer to compare it to her needs
- DAccept the statement and close the file, since a client who declines a needs analysis has made an informed choice
Correct answer: C) Explain that group coverage is usually a salary multiple that may end with the job, and offer to compare it to her needs
Group life is typically one or two times salary — rarely enough for a family — and is not portable. The agent's duty is to make the client aware of the gap and the risk, then let her decide; not to disparage the group plan or to sell without an analysis.
Why the other options are wrong
- AGroup insurance is valuable; disparaging it is inaccurate and unprofessional.
- BSelling without an analysis is exactly what suitability rules prohibit.
- DAccepting the statement without checking leaves a likely gap unexamined.
Exam tip
Group life is usually one to two times salary and not portable. Say so respectfully and offer the comparison.
Common mistake
Either accepting 'I have coverage at work' uncritically or attacking the group plan.
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.