ASSESSING CLIENTS SITUATIONS (Chapter 10)

Question 1

DISCLAIMER

Answer 1

▪ All the questions and reveals are taken from CISRO’s LLQP Life Insurance exam preparation manual.

▪ This study method does not guarantee a pass rate for certification and provincial exams but will increase your confidence in understanding the material if exercised effectively.

▪ For effective results, download the app on your phone and study the chapters in order.

▪ The reveals (answers) don’t need to be word for word, as long as you understand the main concepts in your own words.

▪ Bookmark the questions you struggle with so that it’s easier to revert back and spend more time on them.

▪ If this study method has helped you in any way, feel free to share your comments, reviews and suggestions, I’d love to hear them!

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Question 2

Chapter 9 - Assessing the clients situation

Agents need to understand their clients’ family dynamics before being able to advise how to best provide that support.

Name some factors that determine family dynamics ?

Answer 2

• Current spouse (Dependent vs. self-sufficient)
• Support obligations to ex-spouse(s) (Court-ordered insurance)
• Minor children (Current care arrangements, Child support to ex-spouse Court-ordered insurance)
• Other dependents (Disabled family members, Aging parents)

Question 3

Loss of income is often one of the biggest financial risks associated with death, so the life agent should gain a clear understanding of this income stream. Name some common employment assessment.

Answer 3

• Current income (employment income, Future income potential)
• Employment (Current income, Future income potential, Job stability, Group benefits)
• Business owner (Sole proprietorship, Partnership, Corporation, Existing buy-sell agreement, Business income stability and amounts)
• Retirement (Time to retirement, Retirement income sources)

Question 4

The life agent needs to get a clear picture of the life insured’s existing financial situation. Name some financial assessment that need to be examined.

Answer 4

• Assets (estate objectives; tax liability for his estate as a result of the deemed disposition upon death, corresponding liability such as a mortgage)
• Liquid Assets (chequing account balances, money market funds, term deposits with a maturity of less than one year, or cashable guaranteed investment certificates)
• Fixed assets (tangible property that could be sold to generate cash, homes, vacation properties, jewelry or antiques, vehicles or other valuable property.)
• Investment Assets (Shares in public or private corporations; Pooled investments such as mutual funds, & ETFs Partnership or corporate business interests)
• Pension Entitlements (employer-sponsored registered pension plan, DPSP)
• Debts (Credit Cards, Lines of credit, Mortgage, other loans)
• Current Expenses (Gasoline, Food, fitness activities, vacations)

Question 5

Chapter 9 - Assessing the clients situation

An insurance needs analysis requires the life agent to identify and assess any
existing insurance in place. Name some

Answer 5

• Individual insurance (Type of policy, Face amount/death benefit, CSV, Policyholder, Life/lives insured, Term of coverage, Renewability and convertibility, Beneficiaries, Riders and supplementary benefits, Premiums, Limitations or exclusions)
• Business Insurance (Relationship to buy-sell agreement, Type of policy, Ownership of policy and payment of premiums)
• Group Insurance (Face amount, Policyholder and conditions of membership, End date and convertibility Vulnerabilities such as amount of coverage limited, control of the policy etc…)
• Governments Benefits (CPP, survivor benefits, Death benefit, Survivor’s pension, Children’s benefit, Québec Pension Plan benefits, OAS, Allowance for surviving spouse, Workers’ Compensation benefits)

Question 6

The agent must also understand that
the qualitative questions are as important in identifying the clients priorities What are some questions the agent must ask the client to assess their priorities?

Answer 6

• Family lifestyle (Child care, Surviving spouse’s dependency, family residence, Cottage/vacation home or heirloom properties, Family business)
• Final expenses (What kind of funeral would the life insured like to have, Small and simple, or large and lavish? etc…)
• Plans for future (Post-secondary education, Weddings for children, Other family legacies, Philanthropy)