LLQP Accident & Sickness · Component 1.2 · 35% of the exam
A client has creditor disability insurance on a car loan. In the coverage review this should be counted as:
- A benefit that covers the loan payment for a limited period and is not income replacement
- BA resource equal to the full loan balance, since the insurer clears the debt on a disability claim
- CIncome replacement, since the benefit is paid to the client to use as the household requires
- DEquivalent to individual disability coverage, since both pay when the client cannot work
Correct answer: A) A benefit that covers the loan payment for a limited period and is not income replacement
Lender coverage is tied to one obligation, usually pays for a capped number of months and is underwritten at claim, so it cannot be treated as general protection.
Why the other options are wrong
- BDisability creditor coverage makes payments; it does not pay off the balance.
- CThe benefit goes to the lender against a specific payment, not to the household.
- DIndividual coverage is underwritten at issue and replaces income broadly.
Exam tip
Creditor disability pays a payment, not an income.
Common mistake
Adding creditor coverage to the client's total disability protection.
What this tests
CISRO competency component 1.2 — 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.