LLQP Life Insurance · Component 3.2 · 25% of the exam
The characteristic that most distinguishes a suitable recommendation from a mere product sale is that:
- AIt is for permanent insurance, since permanent coverage serves the client for life rather than for a term
- BIt includes the most riders, since each rider addresses a need the base policy would otherwise leave uncovered
- It is derived from and documented against the client's identified needs, situation and constraints
- DIt has a higher premium, since a larger premium buys more protection for the client's family
Correct answer: C) It is derived from and documented against the client's identified needs, situation and constraints
Suitability is the link between analysis and product. Regulators, E&O insurers and the curriculum all judge a recommendation by whether that link is visible and documented.
Why the other options are wrong
- APermanent insurance is not inherently more suitable.
- BMore riders do not make a recommendation suitable.
- DPremium level has nothing to do with suitability.
Exam tip
Suitability = documented link between the client's needs and the product. That link is what regulators and E&O insurers look for.
Common mistake
Equating a bigger sale with a better recommendation.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Life Insurance module. Written against the published curriculum.
More from component 3
- At policy delivery, the agent should obtain:
- The effective date of a life insurance policy is generally:
- A client's application is approved but he has not paid the first premium when the policy is delivered. The agent should:
- A pre-authorized debit form is part of implementation because:
- During implementation, the agent learns the client wants the policy owned by her corporation instead of personally, as first applied for. The correct step is:
- Which of the following is a legitimate reason an insurer might refuse to issue a policy even after favourable underwriting?
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.