LLQP Accident & Sickness · Component 1.1 · 35% of the exam
A commission-only realtor asks how her income will be treated for disability underwriting. The agent should explain that insurers:
- ADecline commission earners outright, because their income cannot be verified to the insurer's satisfaction
- BTreat commission income as unearned, so only her spouse's salary can support a benefit
- Average documented commission income over recent years and may ask for tax returns and statements
- DUse her best commission year, since that shows what she is capable of earning in the market
Correct answer: C) Average documented commission income over recent years and may ask for tax returns and statements
Variable earnings are averaged so that a single strong or weak year does not distort the benefit, and the insurer wants independent documentation of the average before it issues.
Why the other options are wrong
- ACommission earners are insured routinely once their income is documented.
- BCommission is earned income that stops when the client cannot work.
- DA peak year overstates the loss and will not be accepted as the insurable amount.
Exam tip
Variable income is averaged, not taken at its best or worst point.
Common mistake
Quoting a benefit on a peak commission year.
What this tests
CISRO competency component 1.1 — 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.