LLQP Accident & Sickness · Component 3.1 · 25% of the exam
Which group plan design feature most directly reduces the insurer's anti-selection risk?
- AAdding more optional riders so that members with health concerns can buy extra protection
- Mandatory participation, eligibility waiting periods, non-evidence maximums and late-applicant underwriting
- CRaising the benefit formula so that healthy members have a reason to enrol early
- DLowering the premium so that participation rises without any need for enrolment rules
Correct answer: B) Mandatory participation, eligibility waiting periods, non-evidence maximums and late-applicant underwriting
These features prevent individuals from joining only when they expect to claim. They are why group coverage can be offered without individual underwriting.
Why the other options are wrong
- ARiders do not address selection; optional benefits can worsen it.
- CHigher benefits increase exposure without controlling who joins.
- DPrice does not control who selects into the plan.
Exam tip
Anti-selection controls: participation, waiting periods, NEM, late-applicant evidence, pre-ex limits.
Common mistake
Weakening these controls to make a plan 'more attractive'.
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.