LLQP Life Insurance · Component 1.2 · 35% of the exam
A review shows that a client's former spouse owns a policy insuring the client's life. The agent should explain that:
- Athe client can change the beneficiary because the policy insures his own life
- the former spouse controls the contract, and any change requires her cooperation
- Cthe policy terminated automatically when the marriage ended
- Dthe client is entitled to the cash value because the coverage is on his life
Correct answer: B) the former spouse controls the contract, and any change requires her cooperation
The owner holds the rights, even though the contract insures someone else's life. Where the policy was arranged to secure support, the arrangement may be governed by the separation agreement.
Why the other options are wrong
- ABeing the life insured confers no right to change the designation.
- CA policy is not terminated by the ending of a marriage.
- DCash value belongs to the owner, not to the life insured.
Exam tip
Owner controls the contract; the life insured has no rights over it.
Common mistake
Assuming the person insured can change or access the policy.
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.