LLQP Accident & Sickness · Component 1.2 · 35% of the exam
A client's group LTD plan integrates with CPP disability on a 'direct offset' basis. If she qualifies for CPP disability:
- ACPP disability is repaid to the plan and she keeps the full group benefit, since the insurer is the primary payer
- The group benefit is reduced dollar for dollar by CPP, leaving her total unchanged
- CShe receives both benefits in full because CPP is a government program
- DThe group benefit increases to match the combined amount she qualified for
Correct answer: B) The group benefit is reduced dollar for dollar by CPP, leaving her total unchanged
Direct offset means the plan deducts the primary CPP benefit. Some plans also offset dependants' benefits. The net effect: CPP does not increase the disabled member's income under such plans.
Why the other options are wrong
- ACPP disability is retained by the claimant; the plan simply pays less.
- COffsets exist precisely to prevent stacking government and group benefits.
- DBenefits are reduced by the offset, never increased.
Exam tip
Group LTD offsets CPP disability; do not count CPP as extra income for a group-covered client.
Common mistake
Adding CPP disability to the group benefit when projecting the client's disability income.
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.