LLQP Accident & Sickness · Component 1.1 · 35% of the exam
A client's business partner asks whether the partner's own disability matters to the client's A&S planning. The agent should explain:
- APartners can only be insured together under a group plan, never individually
- BIt matters only if the partnership agreement names the client as beneficiary
- COnly the partner's death affects the client, since disability is a personal matter between the partner and his own insurer
- A partner's disability can trigger a buyout, so buyout and overhead coverage matter
Correct answer: D) A partner's disability can trigger a buyout, so buyout and overhead coverage matter
Business needs in the A&S module include disability buyout and business overhead expense coverage. A partner's long disability creates obligations and losses for the other partner.
Why the other options are wrong
- APartners are routinely insured individually for disability.
- BThe obligation arises from the agreement's disability clause, not from any beneficiary designation.
- CDisability is more likely than death during working years and disrupts the business directly.
Exam tip
Partnership agreements should address disability, not just death; insurance funds both.
Common mistake
Planning buy-sell funding only for death.
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.