LLQP Life Insurance · Component 1.1 · 35% of the exam
Why does the needs analysis ask about the client's will and powers of attorney?
- ATo sell the client a will, since agents earn a referral fee from the lawyers who draft them
- BIt does not, since estate documents are legal matters outside the scope of a life insurance analysis and belong to the client's lawyer
- CInsurers require a will before they will issue a policy, so the agent must confirm one exists
- Because estate documents determine who controls and receives assets, and inconsistencies with designations cause disputes
Correct answer: D) Because estate documents determine who controls and receives assets, and inconsistencies with designations cause disputes
Beneficiary designations override the will for the insurance proceeds, but the two should be consistent. A will that assumes insurance will go to the estate, when a designation sends it elsewhere, can leave the estate short. The agent identifies the mismatch; a lawyer fixes it.
Why the other options are wrong
- AThe agent is not selling wills; the question is about consistency.
- BThe needs analysis does ask about estate documents.
- CInsurers do not require a will.
Exam tip
Beneficiary designations override the will for insurance proceeds; check that the two are consistent and refer inconsistencies to a lawyer.
Common mistake
Assuming the will directs the insurance proceeds.
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.