LLQP Life Insurance · Component 1.3 · 35% of the exam
A client supports an adult child who will never be self-supporting. The analysis should recognize a need that is:
- Atemporary, ending when the child reaches the ordinary age of majority
- Bbest addressed by naming the child directly as beneficiary of a term policy
- lifelong, requiring permanent coverage and a properly structured recipient
- Dalready met by provincial disability assistance without any further planning
Correct answer: C) lifelong, requiring permanent coverage and a properly structured recipient
Support must continue for the dependant's lifetime, and a direct payment could disqualify them from income-tested assistance. Permanent coverage paid to a properly drafted trust is the usual structure.
Why the other options are wrong
- AThe need continues well beyond the age of majority.
- BA direct designation risks the assistance and the money's management.
- DAssistance rarely covers a full standard of living and is income tested.
Exam tip
Lifetime dependency equals permanent coverage plus a trust.
Common mistake
Naming a dependant on assistance directly as beneficiary.
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.