LLQP Life Insurance · Component 1.3 · 35% of the exam
An analysis shows a client's existing coverage exceeds her calculated need by a wide margin. The agent should:
- present the finding and discuss whether some coverage should be reduced or repurposed
- Brecommend replacing the existing coverage with a single larger contract
- Crecommend additional coverage anyway, because needs tend to grow over time
- Dsay nothing, because reducing coverage would lower the agent's future compensation
Correct answer: A) present the finding and discuss whether some coverage should be reduced or repurposed
Over-insurance ties up money the client could use elsewhere. The discussion may reveal a purpose the analysis missed, such as an estate objective, so the client decides once the facts are laid out.
Why the other options are wrong
- BReplacement does not address an amount that is already excessive.
- CRecommending more coverage against the analysis is unsupportable.
- DSilence driven by compensation is a conflict of interest.
Exam tip
Report what the analysis shows, including when it points to less coverage.
Common mistake
Avoiding a conversation that would reduce coverage in force.
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.