LLQP Accident & Sickness · Component 3.2 · 25% of the exam
A group client with 12 employees, tight cash flow and high turnover. The recommended plan design would likely include:
- ARich benefits with immediate eligibility, so that the plan attracts and keeps the staff the business needs
- BAn ASO arrangement, so that the employer pays only the claims actually incurred and saves the premium
- CExecutive-only coverage, since high-turnover staff are unlikely to stay long enough to use the plan
- A pooled package with a three-month waiting period, employee-paid LTD and co-insurance
Correct answer: D) A pooled package with a three-month waiting period, employee-paid LTD and co-insurance
Design responds to budget, turnover and tax. Eligibility waiting periods cut cost from short-tenure staff; employee-paid LTD preserves tax-free benefits.
Why the other options are wrong
- AImmediate eligibility and rich benefits strain cash flow.
- BASO is unsuitable for a small group.
- CExcluding staff defeats the retention purpose and may fail participation rules.
Exam tip
Small group design: waiting period, employee-paid LTD, cost-sharing.
Common mistake
Proposing employer-paid LTD without discussing benefit taxation.
What this tests
CISRO competency component 3.2 — 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.