LLQP Life Insurance · Component 2.1 · 30% of the exam
Which product would an agent consider for a client who needs coverage for exactly the 25 years of a mortgage, wants the lowest level premium and has no permanent need?
- AT-100, since level premiums to age 100 give the client certainty that the cost will never increase
- BUniversal life, since the account value can be used to pay off the mortgage early if the investments do well
- CWhole life, since the cash value will eventually exceed the mortgage balance and can be borrowed against
- 25-year level term, or 20-year renewable term if 25 is unavailable, with convertibility in case needs change
Correct answer: D) 25-year level term, or 20-year renewable term if 25 is unavailable, with convertibility in case needs change
A defined temporary need on a budget is the textbook term case. Convertibility is cheap insurance against the possibility that a permanent need emerges later.
Why the other options are wrong
- AT-100 is permanent and dearer than term.
- BUL adds a savings element the client did not ask for.
- CWhole life over-prices a temporary need.
Exam tip
Temporary, defined need → level term matching the period; keep convertibility.
Common mistake
Recommending permanent coverage for a purely temporary need.
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.