LLQP Accident & Sickness · Component 1.3 · 35% of the exam
A small company depends on a sales manager who generates most of its revenue. If he is disabled for a year, the company's need is for:
- ATravel medical insurance so the manager can be treated abroad quickly and return sooner
- BA richer group health and dental plan so the manager stays loyal during recovery
- Key person disability insurance paying the business for lost revenue and a replacement
- DA deferred profit-sharing plan to compensate the manager for the commissions he loses
Correct answer: C) Key person disability insurance paying the business for lost revenue and a replacement
Key person disability coverage pays the business, not the individual. It funds replacement hiring and offsets lost profit. The curriculum lists key person insurance under business needs.
Why the other options are wrong
- ATravel insurance does nothing for the company's lost revenue.
- BHealth benefits do not compensate the business for a year without its sales manager.
- DA DPSP is a retirement vehicle; it does not fund a replacement.
Exam tip
Key person DI pays the business; the key person's own income is a separate personal need.
Common mistake
Confusing key person disability with the key person's personal DI.
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.