LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A client asks what 'standard of living' means in her disability analysis. The agent should say:
- AHer net worth, since that is the figure a long disability would eventually consume
- BHer group LTD benefit, since that is the amount the plan was designed to protect
- CHer minimum survival costs, since insurance is meant to cover essentials only
- The lifestyle her current income supports — housing, education, activities, savings
Correct answer: D) The lifestyle her current income supports — housing, education, activities, savings
The curriculum lists risks associated with loss of standard of living. The need is to maintain the family's way of life, within what the insurer will issue.
Why the other options are wrong
- ANet worth is a balance sheet figure, not a lifestyle.
- BThe group benefit is a resource, not the standard to protect.
- CSubsistence is what social assistance provides; DI aims to preserve the current standard.
Exam tip
Disability planning targets the current standard of living, not the minimum.
Common mistake
Under-sizing the need to 'the basics'.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Accident & Sickness module. Written against the published curriculum.
More from component 1
- The single most important fact for sizing a client's disability income need is:
- A client's beneficiaries for assets are listed in the fact-finding. Why does this matter for A&S planning?
- A client asks why the agent wants to know how assets are owned (jointly or individually). In the A&S context the answer is:
- A client mentions a back injury five years ago that fully resolved. The agent should:
- Which element of a client's situation most affects the definition of disability that should be recommended?
- Which of the following health facts is most relevant to a client's disability insurance situation?
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.