What is the difference between how an insurer assesses the applicant vs. how an agent assesses the client’s needs?
The insurer assesses risk of death and ability to pay premiums. The agent assesses financial needs of beneficiaries to determine type and amount of insurance.
Who are the key roles in a policy?
Policyholder, Life insured, Beneficiary
Why must family dynamics be assessed first?
Because insurance is designed to replace support for dependants — needs vary by spouse, children, ex-spouses, or others.
How does spousal dependency affect coverage?
A non-working spouse may need full income replacement; a working spouse may require only partial or supplemental coverage.
How are ex-spouses relevant?
Support obligations may require naming them as beneficiaries, sometimes by court order.
How are minor children’s needs addressed?
Coverage ensures same standard of living until adulthood/education; proceeds often held in trust until age of majority.
What about other dependents?
Disabled family members or aging parents may require long-term or lifetime financial support.
Why is employment critical in needs analysis?
Employment income is often the largest financial risk if lost — coverage must replace it.
What four factors should be reviewed for employees?
- Current income (take-home) * Future income potential (raises, inflation) * Job stability (ability to continue paying premiums) * Group benefits (lost at death, but may include life insurance)
What are the key issues for business owners?
Business structure affects taxation, succession, and rollover options.
How does a sole proprietorship end?
Ends at death.
What happens to partnerships at death?
May trigger taxable capital gains.
How do corporations continue after death?
Continue, but shares are deemed disposed at death.
Why consider buy-sell agreements?
They can restrict inheritance of business interests and require funding via life insurance.
How does retirement change the need?
Income replacement may end, but estate planning, taxes, or legacy goals remain.
What three categories of assets are assessed?
- Liquid assets * Fixed assets * Investment assets
Why distinguish between assets?
Some can easily cover estate needs; others are illiquid or intended to pass intact to heirs.
What liabilities must be considered?
- Mortgages * Loans * Credit cards * Lines of credit
How do taxes affect planning?
Deemed disposition of assets and deregistration of RRSP/RRIF create tax liabilities at death unless rollover rules apply.
Why analyze cash flow?
Determines affordability of premiums and whether new coverage is feasible without creating financial strain.
What types of insurance should be reviewed?
- Individual policies (term, whole life, UL) * Business insurance (buy-sell, key person) * Group life insurance (through employment/associations)
What details matter for individual policies?
- Type * Face amount * Beneficiaries * Riders * CSV * Renewability/convertibility * Exclusions * Premiums * Loans/assignments
Why review business-owned coverage?
Because proceeds may benefit the company, not the family.
What vulnerabilities exist in group life coverage?
- Limited amounts * Lack of control * Loss upon job change * High premiums upon conversion
-
Introduction to Life Insurance17
-
Term Life Insurance44
-
Whole Life & T-10039
-
Universal Life38
-
Riders and Supplementary Benefits35
-
Group Life Insurance47
-
Taxation of Life Insurance & Tax Strategies40
-
Business Life Insurance32
-
Application & Underwriting41
-
Assessing Needs & Situation29
-
Recommending a policy33
-
Ongoing Service26
-
Formulas18
-
Practice Questions22
