LLQP Life Insurance · Component 1.2 · 35% of the exam
An employer group plan has a non-evidence maximum. This means:
- AThe plan has no maximum, so every member can obtain whatever amount the salary formula produces
- BEvidence of insurability is required for every member, whatever the amount of coverage applied for
- CNo member can be covered above that amount under any circumstances, since it is the ceiling of the plan
- Coverage up to that amount is issued without medical evidence; amounts above it require evidence
Correct answer: D) Coverage up to that amount is issued without medical evidence; amounts above it require evidence
Group underwriting relies on the group as a whole, so coverage up to the non-evidence maximum is automatic. Higher amounts (for example, a high multiple of a large salary) are individually underwritten. A member who was declined above the maximum has a gap the agent should note.
Why the other options are wrong
- AThe non-evidence maximum is a threshold, not the plan's overall maximum.
- BEvidence is required only above the maximum.
- CMembers can be covered above it by providing evidence.
Exam tip
The non-evidence maximum is where group underwriting stops being automatic. A member declined above it has a real gap.
Common mistake
Reading 'non-evidence maximum' as the ceiling of the plan.
What this tests
CISRO competency component 1.2 — 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.