LLQP Life Insurance · Component 1.1 · 35% of the exam
A client currently receives long-term disability benefits from a group plan. In determining her situation the agent should note that:
- the income ends at her death, and her insurability is likely to be affected
- Ba disability benefit disqualifies the client from holding any life insurance
- Cthe benefit continues to her survivors after her death as a reduced payment
- Dthe benefit will convert automatically into a life insurance death benefit
Correct answer: A) the income ends at her death, and her insurability is likely to be affected
Disability income normally stops when the insured dies, so the household loses it entirely. The underlying condition will also affect underwriting, so any existing coverage becomes especially valuable.
Why the other options are wrong
- BReceiving disability benefits does not disqualify anyone from coverage.
- CDisability benefits are for the disabled person and do not continue to survivors.
- DNo conversion of a disability benefit into life coverage occurs.
Exam tip
Disability income ends at death and the condition affects insurability.
Common mistake
Counting disability benefits among the resources available to survivors.
What this tests
CISRO competency component 1.1 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.