LLQP Accident & Sickness · Component 2.1 · 30% of the exam
The 'relation of earnings to insurance' provision in a disability policy:
- AApplies only to group plans that integrate with government disability benefits
- BSets the premium at issue based on the applicant's documented earnings
- Lets the insurer reduce the benefit at claim if total benefits exceed actual earnings
- DIncreases benefits each year in line with the insured's reported earnings growth
Correct answer: C) Lets the insurer reduce the benefit at claim if total benefits exceed actual earnings
This provision protects against over-insurance when income has fallen since issue. It is one reason to review DI benefits when income changes.
Why the other options are wrong
- AIt is an individual policy provision.
- BPremium is set at issue; this provision operates at claim.
- DThat is a COLA rider.
Exam tip
Relation of earnings: benefit can be cut at claim if income fell; excess premium refunded.
Common mistake
Assuming the full benefit is guaranteed regardless of income at claim.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Accident & Sickness module. Written against the published curriculum.
More from component 2
- A group benefits booklet lists AD&D coverage alongside life and LTD. The AD&D benefit pays:
- A hospital indemnity (hospital cash) policy pays:
- Employment Insurance sickness benefits are available to:
- Which government program coordinates with an individual DI policy through a possible offset AND also affects the definition of insurable income?
- A group plan's 'eligibility waiting period' (probationary period) is:
- A CI policy that is 'convertible' allows the insured to:
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.