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IFSE Institute Life License Qualification Program LLQP Question # 94 Topic 10 Discussion

LLQP Exam Topic 10 Question 94 Discussion:
Question #: 94
Topic #: 10

Sidney is a professional hockey player that recently purchased a large house and wants to have life insurance coverage to cover the cost. He meets with his life insurance agent, Dave, to determine his need and complete an application. After completing a needs analysis, it is determined he should have $25,000,000 worth of life insurance. Dave makes an application to A-Z Life Insurance Co. for $25,000,000 of permanent life insurance. The insurance company tells Dave that they have a maximum retention amount of $20,000,000 per policy.

What will happen in Sidney's case?


A.

He will have to apply for $20,000,000 worth of coverage.


B.

He will have to apply for $20,000,000 worth of coverage with A-Z Life Insurance Co. and $5,000,000 with a reinsurance company.


C.

He will have to apply for two different policies with A-Z Life Insurance Co.: Each less than $20,000,000 but totaling $25,000,000


D.

He will have to apply for $25,000,000 worth of coverage with A-Z Life Insurance Co. and they will find a reinsurance company to cover the $5,000,000.


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