LLQP Accident & Sickness · Component 3.3 · 25% of the exam
A client wants to pay the premium for his adult daughter's disability policy. At implementation the agent must:
- AName the father as beneficiary, since the person paying the premium has the insurable interest
- Document the payer, complete third-party determination and confirm ownership and designations
- CRefuse the arrangement, since only the life insured may pay the premium on a disability policy
- DRecord the father as the life insured, since he is the person funding the contract
Correct answer: B) Document the payer, complete third-party determination and confirm ownership and designations
Third-party payment is permitted but must be identified for anti-money-laundering purposes, and the ownership and designation choices need to reflect what the family actually intends.
Why the other options are wrong
- ADisability benefits are payable to the insured, so a payer is not made beneficiary.
- CA parent may fund a child's coverage.
- DThe life insured is the person whose disability is covered.
Exam tip
Third-party payer means third-party determination.
Common mistake
Processing a parent's payment without recording who the payer is.
What this tests
CISRO competency component 3.3 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Accident & Sickness module. Written against the published curriculum.
More from component 3
- An underwriter assigns a disability applicant to occupational class 2 rather than class 4. The practical effect is that:
- A disability applicant discloses a back condition that resolved four years ago with no recurrence. The likely underwriting outcome is:
- Financial underwriting for an individual disability application exists to:
- A critical illness applicant's mother and sister both had breast cancer before fifty. The underwriter is likely to:
- An applicant for long-term care coverage is seventy-two. The insurer is most likely to require:
- Group long-term disability coverage within the non-evidence maximum is issued without individual medical questions because:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.