LLQP Accident & Sickness · Component 3.2 · 25% of the exam
For a business owner, the recommendation of BOE should specify:
- AThe owner's salary and personal living expenses, since the business must keep paying them while the owner recovers
- BThe buyout amount under the partnership agreement, since BOE is the product that funds the purchase of the interest
- The eligible overhead, maximum, short wait, 12–24 month benefit period and tax treatment
- DOnly the premium, since the benefit is determined by the business's actual expenses at the time the claim is made
Correct answer: C) The eligible overhead, maximum, short wait, 12–24 month benefit period and tax treatment
BOE design differs from personal DI: shorter wait, shorter benefit period, expense-based amount, distinct tax profile.
Why the other options are wrong
- ASalary is personal DI.
- BBuyout is a separate policy.
- DDesign and tax matter.
Exam tip
BOE: short wait, 12–24 months, expense-based, deductible premium/taxable benefit.
Common mistake
Setting BOE's waiting period at 90 days when rent is due monthly.
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.