LLQP Accident & Sickness · Component 1.2 · 35% of the exam
A client's mortgage lender sold her 'mortgage disability insurance'. The review should note that it:
- Pays the mortgage instalment, not her income, often for a limited period
- BPays off the outstanding mortgage balance once she has been disabled for six months
- CPays a monthly benefit she can direct to any expense, since the lender is only the payee
- DReplaces her income at the same percentage as a group LTD plan would
Correct answer: A) Pays the mortgage instalment, not her income, often for a limited period
Lender disability coverage is narrow: it makes the mortgage payment, usually for a limited number of months, under the lender's definition. It is not income replacement and often ends with the mortgage. The curriculum lists lending institution coverage.
Why the other options are wrong
- BPaying off the balance is the life coverage; disability coverage makes the instalments.
- CThe benefit is tied to the mortgage payment and goes to the lender.
- DIt is not income replacement; it covers one payment only.
Exam tip
Lender disability coverage = mortgage payment only, limited period, not portable.
Common mistake
Counting lender coverage as if it replaced the client's 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.