LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A client who owns rental properties says his income would continue if disabled, so he does not need DI. The agent should:
- AAccept his conclusion, since rental income continues regardless of his health
- BRecommend long-term care coverage instead, since his income need is already met
- CInsist on the maximum DI benefit, since rental income is not insurable income
- Agree rents reduce the need, then check his earned income and who would manage the rentals
Correct answer: D) Agree rents reduce the need, then check his earned income and who would manage the rentals
Passive income is a genuine resource. But the client may have earned income from active management or another job, and rentals require management he might not be able to provide. The analysis follows the facts.
Why the other options are wrong
- AThe conclusion may be right, but the analysis still has to be done.
- BLTC does not answer the question he asked.
- CPassive income reduces the insurable amount; there is no case for the maximum.
Exam tip
Passive income reduces DI need; earned income and active management may leave some.
Common mistake
Accepting or rejecting the client's self-assessment without analysis.
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.