LLQP Life Insurance · Component 1.3 · 35% of the exam
A needs analysis should present the client with:
- AA product brochure from the insurer whose policy the agent intends to recommend, so the client can see the features
- BThe agent's commission on the recommended policy, so the client understands the agent's interest in the sale
- The needs identified, the resources counted, the assumptions used and the resulting shortfall
- DOnly the final insurance amount, since the client is interested in the answer rather than in the calculation
Correct answer: C) The needs identified, the resources counted, the assumptions used and the resulting shortfall
Transparency about inputs and assumptions is what makes the recommendation credible and lets the client adjust it. It also documents the basis of the advice.
Why the other options are wrong
- ABrochures are product marketing, not analysis.
- BCommission is a separate disclosure, not part of the analysis.
- DA single number without its basis cannot be evaluated by the client.
Exam tip
Show the work: needs, resources, assumptions, shortfall.
Common mistake
Presenting a coverage amount as if it came from nowhere.
What this tests
CISRO competency component 1.3 — 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.