LLQP Life Insurance · Component 2.1 · 30% of the exam
An older client in modest health wants only enough coverage for funeral costs and final bills. A suitable product is often:
- Aa twenty-year term policy that will expire during the client's lifetime
- Ba large universal life policy funded to the maximum permitted deposit level
- Ca joint last-to-die policy covering the client and an adult child together
- a small permanent policy, possibly simplified or guaranteed issue
Correct answer: D) a small permanent policy, possibly simplified or guaranteed issue
Final expense needs are permanent, modest and immediate. Simplified or guaranteed issue products accept limited or no medical evidence, usually with a graded benefit in the early years, which must be explained.
Why the other options are wrong
- ATerm coverage would expire before the need arises.
- BA maximum funded policy addresses a wealth transfer need, not this one.
- CA last-to-die contract pays at the wrong time for this purpose.
Exam tip
Final expenses equal small permanent coverage, often simplified issue.
Common mistake
Offering term coverage for a need that only arises at death.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Life Insurance module. Written against the published curriculum.
More from component 2
- A client has a need lasting about twenty years and compares a ten-year and a twenty-year term policy. The main point to explain is that:
- A client exercises the conversion privilege on his term policy. The permanent premium will be based on:
- A client notices that a small policy costs proportionately more per unit of coverage than a larger one. The explanation is that:
- A client wants to pay monthly rather than annually. The agent should explain that monthly payment:
- A client asks why dividends from her participating policy are not taxed like interest from a bank. The reason is that a dividend is:
- A universal life policyholder is choosing among the investment options inside her policy. She should understand that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.