LLQP Life Insurance · Component 1.1 · 35% of the exam
Which of the following documents is most useful for verifying a self-employed client's income during fact-finding?
- AA business card showing the client's title and company, since it confirms the client's occupation
- BThe client's own estimate of income, since the client knows the business better than any document
- CA bank's promotional letter offering the client a line of credit, since it shows the bank's view of the income
- Recent personal tax returns and notices of assessment, plus the business's financial statements
Correct answer: D) Recent personal tax returns and notices of assessment, plus the business's financial statements
Tax returns and notices of assessment establish income objectively and are what financial underwriting will require. Financial statements show the business's health. Estimates are a starting point but not evidence.
Why the other options are wrong
- AA business card proves nothing about income.
- BThe client's estimate must be verified.
- CPromotional letters are irrelevant.
Exam tip
Collect the documents underwriting will ask for during fact-finding; it saves weeks later.
Common mistake
Building the analysis on an unverified income figure.
What this tests
CISRO competency component 1.1 — 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.