LLQP Accident & Sickness · Component 3.2 · 25% of the exam
An employer asks how to design a group long-term disability plan that best serves its employees. The agent should raise:
- AThe employer's own coverage, since the owner's needs determine the design of the group plan
- The percentage, the maximum, who pays the premium and therefore taxability, and the definition
- CThe dental co-insurance level, since the whole benefits package must be priced as a single unit
- DOnly the replacement percentage, since that is the figure employees compare between employers
Correct answer: B) The percentage, the maximum, who pays the premium and therefore taxability, and the definition
The cap and the tax treatment often matter more to a member's net outcome than the headline percentage, and the definition decides how long benefits last.
Why the other options are wrong
- AA group plan is designed for the workforce, not for the owner.
- CDental design is a separate decision with no bearing on the disability formula.
- DA rich percentage is worth little behind a low maximum or a taxable benefit.
Exam tip
Percentage, cap, who pays, definition: in that order.
Common mistake
Designing a plan around the replacement percentage alone.
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.