LLQP Life Insurance · Component 3.2 · 25% of the exam
A young client needs a large amount now and expects a permanent need later, but cannot afford permanent coverage today. The recommendation should emphasize:
- Awaiting until the client's income has risen before arranging any coverage for the family
- Bthe smallest permanent policy the budget allows, leaving the large need uncovered
- convertible term coverage, so permanent insurance can be secured later without evidence
- Dyearly renewable term, since its first year premium is the lowest available
Correct answer: C) convertible term coverage, so permanent insurance can be secured later without evidence
Convertibility preserves the option to move to permanent coverage regardless of future health. The conversion deadline should be recorded so the right is exercised before it expires.
Why the other options are wrong
- ADelay leaves the family exposed and risks a change in health.
- BA small permanent policy leaves the immediate exposure unaddressed.
- DA low first year premium rises steeply and ignores the permanent need.
Exam tip
Convertibility is what protects a future permanent need.
Common mistake
Choosing term on price without checking the conversion terms.
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.