LLQP Life Insurance · Component 2.1 · 30% of the exam
A client wants a whole life policy paid up by retirement at 65 and is now 45. The design that fits is:
- ADecreasing term to 65, since the coverage falls as the client's savings grow and ends when the premiums stop
- A 20-pay or pay-to-65 whole life policy, with premiums compressed into the working years
- CLife-pay whole life, since the lower annual premium leaves more of the client's income available for retirement savings
- DYearly renewable term, since the client can stop renewing at 65 and the policy will then be paid up
Correct answer: B) A 20-pay or pay-to-65 whole life policy, with premiums compressed into the working years
Limited-pay designs align the premium period with earning years. The premium is higher than life-pay but nothing is owed in retirement, which is the client's stated goal.
Why the other options are wrong
- ADecreasing term shrinks and expires.
- CLife-pay continues premiums past 65.
- DYRT is not permanent and rises in cost every year.
Exam tip
Client goal 'no premiums in retirement' → limited-pay permanent insurance.
Common mistake
Offering life-pay whole life to a client who does not want premiums in retirement.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Life Insurance module. Written against the published curriculum.
More from component 2
- A client has a need lasting about twenty years and compares a ten-year and a twenty-year term policy. The main point to explain is that:
- A client exercises the conversion privilege on his term policy. The permanent premium will be based on:
- A client notices that a small policy costs proportionately more per unit of coverage than a larger one. The explanation is that:
- A client wants to pay monthly rather than annually. The agent should explain that monthly payment:
- A client asks why dividends from her participating policy are not taxed like interest from a bank. The reason is that a dividend is:
- A universal life policyholder is choosing among the investment options inside her policy. She should understand that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.