LLQP Life Insurance · Component 1.3 · 35% of the exam
An agent completes a thorough needs analysis for a young family. The analysis should be treated as:
- a snapshot to be revisited as income, debts, dependants and goals change
- Ba regulatory formality that need not influence the recommendation actually made
- Ca document belonging to the insurer rather than to the client or the agent
- Da permanent conclusion that will hold until the children have finished their education
Correct answer: A) a snapshot to be revisited as income, debts, dependants and goals change
Needs move with circumstances, so the analysis is a starting point and a review schedule. Setting a review cycle, and revisiting after major life events, is part of the ongoing suitability obligation.
Why the other options are wrong
- BThe analysis is precisely what the recommendation must rest on.
- CThe analysis belongs in the client file and supports the advice given.
- DCircumstances change long before children finish education.
Exam tip
A needs analysis is a snapshot with a review date, not a conclusion.
Common mistake
Filing an analysis and never returning to it.
What this tests
CISRO competency component 1.3 — 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.