LLQP Life Insurance · Component 1.1 · 35% of the exam
A newly married client asks whether he needs life insurance now, since his spouse earns a good income. The best analysis is:
- The need may be modest today but will rise with a mortgage or children, so protecting insurability now is worth considering
- BNo coverage is ever needed for dual-income couples, since each spouse can support themselves if the other dies
- CHe should buy the maximum available now, since premiums will never be lower than they are at his current age and health class
- DHe should wait until age 40, when his income and family responsibilities will justify the premium
Correct answer: A) The need may be modest today but will rise with a mortgage or children, so protecting insurability now is worth considering
Needs analysis is forward-looking. A young couple's current need may be small, but their insurability is at its best and cheapest now. Locking in convertible coverage or purchase options anticipates the growth in need.
Why the other options are wrong
- BDual-income couples often have real needs once a mortgage or children arrive.
- CThe maximum is not a needs-based recommendation.
- DWaiting risks a decline in insurability and higher premiums.
Exam tip
Young, healthy, low current need: think insurability protection — convertible term, GIB.
Common mistake
Dismissing the young client entirely instead of planning for the coming need.
What this tests
CISRO competency component 1.1 — 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.