LLQP Life Insurance · Component 1.1 · 35% of the exam
A client supports elderly parents overseas with monthly remittances. In the needs analysis, this is:
- AA tax deduction that reduces the client's income and therefore the amount of coverage the family needs
- BIgnored because the parents are abroad, since insurance can only address needs within Canada
- An ongoing dependency that would end at the client's death and can be funded by insurance
- DA capital need only, since the parents will receive a single lump sum from the estate
Correct answer: C) An ongoing dependency that would end at the client's death and can be funded by insurance
Adult dependants — including parents, wherever they live — are on the curriculum's list of dependency relationships. Their support is an income need to be replaced for their expected lifetime.
Why the other options are wrong
- ASupport of parents abroad is not a deduction.
- BLocation does not remove the dependency.
- DMonthly support is an income need, not a one-time capital need.
Exam tip
Dependants are anyone whose support would stop at the client's death — children, spouse, parents, siblings, wherever they are.
Common mistake
Counting only the nuclear family as dependants.
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.