LLQP Accident & Sickness · Component 2.2 · 30% of the exam
A 'cost-of-living' feature that indexes the DI benefit BEFORE a claim (automatic increase benefit) differs from COLA in that it:
- AApplies during a claim, increasing each monthly payment for as long as the disability continues
- Raises the coverage amount each year while in force, with a premium increase and a right to refuse
- CIs provided free of charge as long as the insured accepts every increase the insurer offers
- DReduces the benefit if the insured's income has not kept pace with the increases already accepted
Correct answer: B) Raises the coverage amount each year while in force, with a premium increase and a right to refuse
Automatic increase benefits keep pace with inflation before disability; COLA does so during a claim. Some policies offer both.
Why the other options are wrong
- AIndexing during a claim is the COLA rider, not the automatic increase benefit.
- CThe premium rises with each increase.
- DIt increases the benefit; it never reduces it.
Exam tip
Automatic increase = pre-claim indexing. COLA = in-claim indexing.
Common mistake
Assuming COLA increases the benefit before a claim.
What this tests
CISRO competency component 2.2 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Accident & Sickness module. Written against the published curriculum.
More from component 2
- A group benefits booklet lists AD&D coverage alongside life and LTD. The AD&D benefit pays:
- A hospital indemnity (hospital cash) policy pays:
- Employment Insurance sickness benefits are available to:
- Which government program coordinates with an individual DI policy through a possible offset AND also affects the definition of insurable income?
- A group plan's 'eligibility waiting period' (probationary period) is:
- A CI policy that is 'convertible' allows the insured to:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.