LLQP Life Insurance · Component 1.3 · 35% of the exam
An analysis shows a large need lasting fifteen years and a smaller need lasting for life. The coverage design that fits is:
- Ano coverage at all until the temporary portion of the need has expired
- a layered approach combining term coverage for the temporary portion with permanent coverage
- Cone term policy for the whole amount, renewed indefinitely as each term ends
- Done permanent policy for the whole amount, providing the greatest certainty
Correct answer: B) a layered approach combining term coverage for the temporary portion with permanent coverage
Matching each layer to its own duration keeps the cost proportionate. Permanent coverage carries the lifelong portion, while term coverage handles the larger temporary need at a much lower price.
Why the other options are wrong
- ADelaying coverage leaves the largest part of the need unprotected.
- CRenewal rates rise steeply and term coverage eventually ends.
- DInsuring the temporary portion permanently costs far more than necessary.
Exam tip
Match the term of the coverage to the term of each need.
Common mistake
Buying one product for a need that has two different durations.
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.