LLQP Life Insurance · Component 2.1 · 30% of the exam
Which client is a typical candidate for whole life insurance?
- AA client who wants to manage the policy's investments personally and adjust deposits as circumstances change
- BA young couple who need maximum coverage for a mortgage on a tight budget during the child-rearing years
- CA client who wants coverage for exactly five years while a business loan is being paid down
- A client with a permanent need who values guarantees and forced savings, and can afford the level premium
Correct answer: D) A client with a permanent need who values guarantees and forced savings, and can afford the level premium
The curriculum describes whole life as suited to longer-term risks and a savings component. Its guarantees and simplicity contrast with universal life, where the client takes investment decisions and risk.
Why the other options are wrong
- AA client who wants to manage investments is a universal life candidate.
- BA tight budget and a temporary need point to term.
- CA five-year need is served by term.
Exam tip
Whole life suits permanent needs, a preference for guarantees, and a desire for forced savings — if the higher premium is affordable.
Common mistake
Recommending whole life to a client whose need is clearly temporary.
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.