LLQP Life Insurance · Component 1.3 · 35% of the exam
In a needs analysis for a business owner, 'business continuation' needs include all of the following EXCEPT:
- The owner's personal retirement savings plan
- BFunding a buy-sell agreement at death
- CKey person coverage on the owner
- DRepaying business loans and guarantees
Correct answer: A) The owner's personal retirement savings plan
Retirement savings are a personal accumulation goal for the living owner, not a continuation need triggered by death. Buy-sell funding, key person coverage and debt repayment are the classic business continuation needs.
Why the other options are wrong
- BBuy-sell funding is a core continuation need.
- CKey person coverage protects the business's continuity.
- DDebt and guarantee repayment keep the business solvent at the owner's death.
Exam tip
Continuation needs arise at death and keep the business alive or wind it down cleanly.
Common mistake
Mixing personal financial goals into the business needs analysis.
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.