LLQP Life Insurance · Component 2.1 · 30% of the exam
An accidental death and dismemberment (AD&D) benefit in a group plan is 'basic' when:
- AIt pays for death from illness as well as accident, since basic coverage is broader than the voluntary version
- It is provided automatically to all eligible members, usually employer-paid, at an amount tied to basic life
- CThe member must apply and pay for it, since basic AD&D is the layer the member chooses to add
- DIt has no exclusions, since basic coverage is issued without underwriting and cannot be limited
Correct answer: B) It is provided automatically to all eligible members, usually employer-paid, at an amount tied to basic life
Basic AD&D comes with the plan; voluntary AD&D is elected and paid by the member. Both exclude non-accidental causes and typically list exclusions such as self-inflicted injury, war and certain aviation risks.
Why the other options are wrong
- AAD&D pays for accidents only.
- CMember-applied, member-paid AD&D is voluntary, not basic.
- DAD&D always carries exclusions.
Exam tip
Basic AD&D is automatic and employer-paid; voluntary AD&D is elected and member-paid. Both exclude illness.
Common mistake
Counting AD&D as coverage for death from any cause.
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 Life Insurance module. Written against the published curriculum.
More from component 2
- A client has a need lasting about twenty years and compares a ten-year and a twenty-year term policy. The main point to explain is that:
- A client exercises the conversion privilege on his term policy. The permanent premium will be based on:
- A client notices that a small policy costs proportionately more per unit of coverage than a larger one. The explanation is that:
- A client wants to pay monthly rather than annually. The agent should explain that monthly payment:
- A client asks why dividends from her participating policy are not taxed like interest from a bank. The reason is that a dividend is:
- A universal life policyholder is choosing among the investment options inside her policy. She should understand that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.