LLQP Accident & Sickness · Component 3.1 · 25% of the exam
The underwriter's treatment of an applicant's 'existing group LTD' when reviewing an individual DI application is to:
- ADouble the individual benefit so that it can replace the group coverage if the applicant changes jobs
- BRequire the applicant to cancel the group coverage before the individual policy is issued
- Count it toward the participation limit, often at after-tax value, and issue only the remaining amount
- DIgnore it, since group coverage is not portable and cannot be relied on at claim
Correct answer: C) Count it toward the participation limit, often at after-tax value, and issue only the remaining amount
Group LTD counts toward participation limits. Taxable group benefits are often counted at a reduced value. The individual benefit fills the remainder.
Why the other options are wrong
- ALimits reduce, not double, the amount.
- BInsurers cannot cancel group coverage.
- DGroup coverage is material to the limit.
Exam tip
Group LTD counts toward participation limits (often at after-tax value).
Common mistake
Applying for individual DI as if no group coverage existed.
What this tests
CISRO competency component 3.1 — 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.