LLQP Life Insurance · Component 1.2 · 35% of the exam
A review finds a client holds both a mortgage life policy through her lender and a personal term policy covering the same debt. The agent should:
- Arecommend keeping both, since more coverage is always better than less for a family
- Bcancel the personal policy immediately, since lender coverage is always cheaper
- point out the duplication and discuss which coverage better serves her
- Dadvise that duplicate coverage will be refused at the time of any claim
Correct answer: C) point out the duplication and discuss which coverage better serves her
Duplication wastes premium the client could use elsewhere. The personal policy usually offers a level benefit, a chosen beneficiary and portability, which makes it the stronger of the two to keep.
Why the other options are wrong
- APaying twice for the same risk is not in the client's interest.
- BLender coverage typically declines in value and is not portable.
- DBoth contracts would pay according to their own terms.
Exam tip
Duplicate mortgage coverage is a common and expensive review finding.
Common mistake
Leaving both in force because cancelling either feels like losing coverage.
What this tests
CISRO competency component 1.2 — 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.