LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A client's group LTD covers 66% of salary, taxable, to a maximum that is below her formula amount. Her articulated disability need is:
- AHer full salary, since a group benefit is entirely offset once individual coverage is bought
- BThe individual premium only, since the group plan already meets her income need
- The after-tax gap at the capped taxable benefit, plus the definition switch and portability
- DZero, because a 66% formula already reaches the insurer's participation limit
Correct answer: C) The after-tax gap at the capped taxable benefit, plus the definition switch and portability
Articulating the need integrates existing coverage. Three gaps appear: amount (cap and tax), definition (own-occ to any-occ), and portability (lost with the job). Individual DI addresses all three.
Why the other options are wrong
- AGroup coverage covers part of the need; only the gap remains.
- BPremium is a cost, not a need.
- DThe cap, the tax and the two-year definition change leave real gaps.
Exam tip
Group LTD gaps: amount (cap/tax), definition (2-year switch), portability.
Common mistake
Stopping the analysis at 'she has group LTD'.
What this tests
CISRO competency component 1.3 — 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.