LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A client's spouse works for the same small business as the client. If the business fails because of the client's disability:
- AGroup benefits continue for both spouses under the plan's mandatory continuation provision
- BNothing changes for the spouse, since her employment contract is separate from his ownership
- Both incomes and the business's value are at risk, so personal, business and spousal needs all apply
- DOnly one income is lost, since the spouse can be re-hired by whoever buys the business
Correct answer: C) Both incomes and the business's value are at risk, so personal, business and spousal needs all apply
Concentrated family exposure to one business magnifies the disability need. The analysis has to see the household's dependence on the business as a whole.
Why the other options are wrong
- AGroup benefits end when the business fails.
- BThe spouse's income depends on the same business.
- DThere is no successor business; the failure ends both incomes.
Exam tip
Family businesses concentrate risk; insure the owner's income and the business's survival.
Common mistake
Treating the spouse's income as an independent resource when it comes from the same business.
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.