LLQP Accident & Sickness · Component 1.1 · 35% of the exam
A client's business is highly seasonal. Which A&S design consideration follows?
- ANone, since seasonal income is averaged automatically when a claim is made
- BThe client should apply in the busy season so the highest income is documented and the benefit set at its peak
- COnly travel insurance is relevant, since the off-season is usually spent away
- Income is documented annually, and premium timing and waiting period follow the cash flow
Correct answer: D) Income is documented annually, and premium timing and waiting period follow the cash flow
Seasonal income is averaged annually for insurable income. Premium mode and the waiting period should fit the client's cash-flow cycle so the policy does not lapse in the off-season.
Why the other options are wrong
- AInsurers average documented income at underwriting, not at claim.
- BIncome is documented from tax returns; the season of application is irrelevant.
- CTravel insurance has nothing to do with the design of disability coverage.
Exam tip
Seasonal income: annual averaging, premium timing matched to cash flow.
Common mistake
Setting up monthly premiums that bounce in the off-season.
What this tests
CISRO competency component 1.1 — 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.