LLQP Life Insurance · Component 3.2 · 25% of the exam
A recommendation for a client whose income is seasonal should consider:
- AOnly annual premiums, since a client with seasonal income cannot be relied on to keep up monthly payments
- A premium mode and timing that match cash flow, for example annual payment in the high-income season
- CNo insurance at all, since a client whose income is seasonal cannot commit to a long-term premium obligation
- DMonthly payments regardless, since spreading the cost evenly is the only way to keep the premium affordable
Correct answer: B) A premium mode and timing that match cash flow, for example annual payment in the high-income season
Premium mode is a suitability factor. A client whose income arrives in a few months a year is better served by an annual premium timed to that income than by monthly debits that bounce in the off-season.
Why the other options are wrong
- AAnnual premiums are a good option but timing matters too.
- CSeasonal income is not a reason to go without coverage.
- DMonthly payments in a no-income season invite lapse.
Exam tip
Match premium mode and timing to cash flow to prevent lapse.
Common mistake
Setting up monthly debits for a client with seasonal income.
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.