LLQP Life Insurance · Component 1.1 · 35% of the exam
Why does a needs analysis ask about a stay-at-home parent's death, even though that parent earns no income?
- ATo calculate the CPP survivor benefits the family would receive on that parent's death
- BIt does not; only income earners need coverage, and the analysis records the non-earner for completeness alone
- Because the surviving earner would have to pay for childcare and household services the parent provided
- DBecause insurers require both spouses to be insured before they will issue a policy on either of them
Correct answer: C) Because the surviving earner would have to pay for childcare and household services the parent provided
A stay-at-home parent's death creates costs — childcare, household help — and may reduce the surviving earner's ability to work. The economic value of unpaid work is a legitimate insurance need, and the curriculum lists the stay-at-home parent among the dependency relationships to identify.
Why the other options are wrong
- ACPP survivor benefits depend on the deceased's contributions, which a non-earner may not have.
- BThe curriculum lists the stay-at-home parent among dependency relationships; unpaid work has replacement cost.
- DInsurers do not require both spouses to be insured.
Exam tip
Value the non-earning spouse by what it would cost to replace what they do, not by their salary.
Common mistake
Treating a non-earner as having no insurable financial value.
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.