LLQP (Life Licence Qualification Program) Practice Exam · Question
A financial advisor conducting a client needs analysis discovers that the client has significant outstanding debts and limited savings. Which ethical principle is most directly challenged if the advisor immediately recommends the most expensive life insurance product without exploring other solutions?
Recommending the most expensive product without considering the client's financial situation and exploring alternatives directly violates the principle of suita
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Question: A financial advisor conducting a client needs analysis discovers that the client has significant outstanding debts and limited savings. Which ethical principle is most directly challenged if the advisor immediately recommends the most expensive life insurance product without exploring other solutions?
Answer options:
- Confidentiality.
- Due diligence. ✅ Suitability.
- Transparency.
Correct answer: Suitability.
Explanation: Recommending the most expensive product without considering the client's financial situation and exploring alternatives directly violates the principle of suitability. Advisors are obligated to ensure that recommended products are appropriate for the client's specific needs, objectives, and financial capacity, especially when debt and limited savings are present.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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