LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A client asks whether a disability would affect her retirement. The agent should explain that:
- ARetirement comes earlier, because disability benefits continue for life once approved
- BIt would not, because retirement savings are held separately from employment income
- RRSP, pension and CPP contributions stop, so retirement itself becomes a need
- DCPP pays double after a long disability to make up for the lost years of contributions
Correct answer: C) RRSP, pension and CPP contributions stop, so retirement itself becomes a need
DI benefits are usually sized to living expenses; retirement saving is often forgotten. A long disability from 45 to 65 can wipe out 20 years of contributions.
Why the other options are wrong
- ADisability benefits end at 65; they do not fund an early retirement.
- BSaving stops when earnings stop.
- DCPP disability pays a fixed amount; there is no doubling.
Exam tip
Include lost retirement contributions in the disability need; consider a retirement protection rider.
Common mistake
Sizing DI to expenses only.
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.