LLQP Life Insurance · Component 1.3 · 35% of the exam
In a needs analysis, the final expenses component typically includes:
- Athe estimated income taxes the survivors will pay over their remaining lifetimes
- funeral and burial costs, legal and probate fees and outstanding medical accounts
- Cthe mortgage balance and all other long-term debts owed at the date of death
- Dthe survivors' living costs for the first full year following the death
Correct answer: B) funeral and burial costs, legal and probate fees and outstanding medical accounts
Final expenses are the immediate costs of the death itself, payable within weeks. They are separate from debt repayment and from ongoing income replacement, and they demand liquidity rather than long-term capital.
Why the other options are wrong
- ASurvivors' future taxes are not a final expense of the estate.
- CDebt repayment is counted separately from final expenses.
- DOngoing living costs belong in the income replacement component.
Exam tip
Final expenses are the immediate costs of dying, not ongoing needs.
Common mistake
Rolling debts and living costs into the final expenses figure.
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.