LLQP Accident & Sickness · Component 3.2 · 25% of the exam
A self-employed client with no group coverage is recommended a disability policy. The agent should also consider:
- AAn accidental death rider, since self-employed clients face a higher accidental death exposure than employees
- BA group plan for the client alone, since individual coverage is more expensive than group rates
- CDeferring the recommendation until the business has been trading for at least five years
- Business overhead expense coverage, since the practice's fixed costs continue during a disability
Correct answer: D) Business overhead expense coverage, since the practice's fixed costs continue during a disability
A self-employed client faces two distinct exposures at once, and covering only the household income leaves the business's fixed costs to be paid from a benefit sized for living expenses.
Why the other options are wrong
- AAn accidental death rider addresses death, not the loss of income or overhead.
- BA group plan cannot be established for a single person.
- CDelay leaves the client uninsured during the years the business is most fragile.
Exam tip
Self-employed clients have a household need and a business need.
Common mistake
Covering the owner's income and ignoring the practice's overhead.
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.