LLQP Life Insurance · Component 2.2 · 30% of the exam
A client wants coverage on her two young children mainly to guarantee their future insurability. The most cost-effective option is usually:
- AGroup life through her employer, since the dependent life benefit covers the children and converts when they reach adulthood
- A child rider on her own policy, providing small term coverage on each child with a conversion option at adulthood
- CAn accidental death rider on her own policy, which extends to the children and guarantees their future insurability
- DSeparate whole life policies on each child, which lock in insurability and build cash value the children can use later
Correct answer: B) A child rider on her own policy, providing small term coverage on each child with a conversion option at adulthood
Child riders are inexpensive and their conversion option secures insurability. Separate policies may make sense for larger amounts or savings goals, but for insurability alone the rider is efficient.
Why the other options are wrong
- AGroup life covers children only in small amounts and offers no conversion for them.
- CAD riders cover only accidents and do not protect insurability.
- DSeparate policies cost more for the same insurability goal.
Exam tip
Children's insurability: child rider with conversion, unless there is a reason for standalone policies.
Common mistake
Overlooking the conversion option as the main value of a child rider.
What this tests
CISRO competency component 2.2 — 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.