LLQP Life Insurance · Component 2.1 · 30% of the exam
A client wants certainty above all: a premium that never changes and values he can count on. The product that fits is:
- guaranteed whole life, with level premiums and guaranteed cash values
- Buniversal life with an adjustable cost of insurance and index-linked accounts
- Cyearly renewable term, which adjusts each year to reflect the current age
- Dan adjustable whole life policy whose premium the insurer may revise
Correct answer: A) guaranteed whole life, with level premiums and guaranteed cash values
Guaranteed whole life fixes the premium and the cash value schedule, with dividends adding to the values in a participating version. The certainty costs more than adjustable or term alternatives.
Why the other options are wrong
- BAdjustable charges and index accounts are the opposite of certainty.
- CYearly renewable term premiums rise every year by design.
- DAn adjustable contract allows the insurer to revise the premium.
Exam tip
When a client wants certainty, guarantees are the feature to price.
Common mistake
Offering a flexible product to a client whose stated priority is certainty.
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.