LLQP Accident & Sickness · Component 1.3 · 35% of the exam
Which of the following would raise a client's disability income need rather than lower it?
- AEmergency savings, since they must be rebuilt after being drawn down during the wait
- BA spouse's income, since it is lost whenever the spouse becomes a full-time caregiver
- Extra disability costs — medication, therapy, home help, transportation
- DInvestment income, since it is taxed at a higher rate while the client is on claim
Correct answer: C) Extra disability costs — medication, therapy, home help, transportation
Disability often increases expenses. The need should add disability-related costs, not just carry forward the current budget. The other options are resources that reduce the need.
Why the other options are wrong
- ASavings bridge the waiting period and reduce the need.
- BSpousal income is a resource that reduces the need, absent a specific caregiving plan.
- DInvestment income continues and reduces the need; its tax rate does not change.
Exam tip
Add disability-related costs to the need; subtract continuing resources.
Common mistake
Assuming expenses drop during disability.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Accident & Sickness module. Written against the published curriculum.
More from component 1
- The single most important fact for sizing a client's disability income need is:
- A client's beneficiaries for assets are listed in the fact-finding. Why does this matter for A&S planning?
- A client asks why the agent wants to know how assets are owned (jointly or individually). In the A&S context the answer is:
- A client mentions a back injury five years ago that fully resolved. The agent should:
- Which element of a client's situation most affects the definition of disability that should be recommended?
- Which of the following health facts is most relevant to a client's disability insurance situation?
Practice the whole Accident & Sickness module
Timed sets weighted like the exam, and review of every question you miss. Free to start.