LLQP Life Insurance · Component 3.2 · 25% of the exam
When choosing between two similar products from different insurers, which comparison is most meaningful?
- AThe commission each insurer pays, since a higher commission indicates a product the insurer stands behind
- BThe illustrated values alone, since they show what the client will actually receive from each policy over the years it is held
- CThe insurer with the more professional brochure, since presentation reflects the quality of the company
- Guaranteed values, premium guarantees, rider definitions, conversion and renewal terms, and financial strength
Correct answer: D) Guaranteed values, premium guarantees, rider definitions, conversion and renewal terms, and financial strength
Non-guaranteed columns can be made to look attractive with optimistic assumptions. Guarantees and contract terms are what the client actually buys; financial strength determines whether the promises will be kept decades later.
Why the other options are wrong
- ACommission does not bear on suitability.
- BIllustrated non-guaranteed values can be manipulated by assumptions.
- CBrochures are not a comparison basis.
Exam tip
Compare guarantees, contract terms, rider definitions and financial strength — the things the client actually buys.
Common mistake
Choosing between insurers on illustrated values alone.
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.