Which step should come FIRST in the individual life insurance planning process?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Sound personal insurance planning begins with defining the client's goals and objectives — the financial objectives the life insurance is intended to accomplish, such as income replacement, debt liquidation, estate liquidity, or education funding. Only after goals are identified does the planner gather financial information, analyze needs and exposures, evaluate alternatives, and recommend an appropriate policy. Selecting a product first, or skipping the needs analysis, inverts the process and risks recommending coverage that does not fit the client's actual situation.
Why the other options are wrong
- B) Picking a specific policy before assessing the client's needs puts the product ahead of the problem; the correct sequence is goals first, then products.
- C) Recommending the cheapest product without gathering information ignores the purpose of the coverage and the client's individual circumstances.
- D) Completing an application before a needs analysis is premature; the application should reflect a coverage decision made after analysis.
Memory hook
Plan before you sell: goals first, needs analysis second, product recommendation third, application last.