Priority Ladder

Question 1

What is usually the first insurance priority if the client has dependents?

Answer 1

Life insurance (protects against death risk, catastrophic for dependents).

Question 2

If the client is young, has high earning potential, and no strong disability coverage, what is the priority?

Answer 2

Disability insurance (protects human capital).

Question 3

When is critical illness insurance most relevant?

Answer 3

When the client wants lump-sum protection for major illness (e.g., cancer, heart attack), especially if health risks are higher.

Question 4

If client has no emergency savings and no short-term disability, which planning area rises in importance?

Answer 4

Build emergency fund to cover STD gap.

Question 5

Where does RESP/education savings fall in the priority ladder?

Answer 5

After protection (life, disability, CI) and emergency fund/debt repayment are addressed.

Question 6

On CFP exams, if a client says their priority is care for dependents, what should you recommend first?

Answer 6

Increase life insurance coverage.