LLQP Life Insurance · Component 1.1 · 35% of the exam
A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A lifetime support need that may call for permanent insurance and a trust
- BA short-term need that ends when the child turns 18 and becomes an adult in the eyes of the law
- CA reason to decline coverage, since a dependant with special needs makes the risk too complex to underwrite
- DIrrelevant to the analysis, because provincial disability programs cover all of the child's costs for life
Correct answer: A) A lifetime support need that may call for permanent insurance and a trust
Lifetime support of a dependant with special needs is a permanent need, which points toward permanent insurance rather than term, and toward planning tools such as a trust so that proceeds do not disqualify the child from means-tested benefits. Government programs rarely cover the full cost.
Why the other options are wrong
- BThe dependency does not end at 18; a permanently disabled child may need support for decades.
- CA dependant with special needs is a reason for careful planning, not for declining coverage.
- DGovernment programs are income-tested and limited, and inheritances can disqualify the child.
Exam tip
Permanent dependency means a permanent need, which points to permanent insurance and often a trust as beneficiary.
Common mistake
Sizing coverage as if all children become independent adults.
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 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:
- A client owns a cottage that has appreciated substantially. Why does this matter in a life insurance needs analysis?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.