LLQP Accident & Sickness · Component 1.2 · 35% of the exam
A client has group long-term disability coverage of 60% of salary to a monthly maximum. The first thing the agent should check is:
- Whether her salary exceeds the level at which the monthly maximum applies
- BWhether the plan is contributory, since employee-paid plans always pay the full 60%
- CWhether the plan was set up before or after she joined, since earlier plans have no cap
- DWhether the insurer is federally regulated, since federal insurers cannot impose a maximum
Correct answer: A) Whether her salary exceeds the level at which the monthly maximum applies
Group LTD formulas are capped. A client whose 60% would exceed the maximum is covered at the maximum only. The curriculum lists non-evidence maximum, maximum overall amount and all-sources maximum as group DI limits.
Why the other options are wrong
- BWho pays the premium affects taxability, not whether the monthly cap bites.
- CThe plan's start date has nothing to do with whether the maximum applies to her.
- DEvery group LTD plan has a maximum regardless of the insurer's regulator.
Exam tip
Check the LTD maximum against the client's salary; the cap is where high earners are under-insured.
Common mistake
Multiplying salary by 60% without applying the maximum.
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.