LLQP Accident & Sickness · Component 3.2 · 25% of the exam
A client asks whether her disability benefit should be indexed. The agent should explain that indexing:
- AIs included in every disability contract at no additional cost to the policyholder
- Raises the premium but protects purchasing power over a claim that could run for decades
- CApplies to the premium, which rises each year in line with the published inflation index
- DIs unnecessary, since disability claims rarely continue for more than a year or two
Correct answer: B) Raises the premium but protects purchasing power over a claim that could run for decades
A claim beginning in a client's thirties can run for thirty years, over which a level benefit loses most of its value, so indexing is a real consideration despite its cost.
Why the other options are wrong
- AIndexing is an optional rider with its own premium.
- CThe rider indexes the benefit, not the premium.
- DLong claims are precisely the ones disability insurance exists to fund.
Exam tip
The younger the client, the more indexing matters.
Common mistake
Omitting indexing for a young client with a benefit period to sixty-five.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Accident & Sickness module. Written against the published curriculum.
More from component 3
- An underwriter assigns a disability applicant to occupational class 2 rather than class 4. The practical effect is that:
- A disability applicant discloses a back condition that resolved four years ago with no recurrence. The likely underwriting outcome is:
- Financial underwriting for an individual disability application exists to:
- A critical illness applicant's mother and sister both had breast cancer before fifty. The underwriter is likely to:
- An applicant for long-term care coverage is seventy-two. The insurer is most likely to require:
- Group long-term disability coverage within the non-evidence maximum is issued without individual medical questions because:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.