LLQP Life Insurance · Component 3.2 · 25% of the exam
A client wants the highest possible death benefit for a fixed monthly budget and has no other needs. The recommendation that best serves him is:
- Term insurance for the largest amount and appropriate term the budget allows
- BUniversal life with a large fund, since the investment growth will eventually pay for the coverage
- CAn annuity, since guaranteed lifetime payments are the most reliable protection for a fixed budget
- DWhole life with paid-up additions, since the death benefit grows over time without further underwriting
Correct answer: A) Term insurance for the largest amount and appropriate term the budget allows
Given the stated objective and constraint, term maximizes protection per dollar. Recommending permanent insurance with a savings element the client did not ask for would be unsuitable, however profitable.
Why the other options are wrong
- BUL with a large fund diverts budget from coverage.
- CAn annuity is an income product, not protection.
- DWhole life with PUA is a savings-oriented product the client did not ask for.
Exam tip
Stated objective plus stated constraint dictate the product: maximum protection per dollar → term.
Common mistake
Recommending permanent insurance because it is more profitable, not because it is suitable.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.