LLQP Life Insurance · Component 1.2 · 35% of the exam
In reviewing a client's group coverage, the agent finds an accidental death and dismemberment benefit equal to the basic life amount. The correct way to present it is:
- AAs worthless, since accidental deaths are rare and the benefit will almost certainly never be paid to the family
- BAs doubling the client's life coverage, since the AD&D amount equals the basic life amount and both pay at death
- As an additional amount payable only if death or loss is accidental, not as part of general protection
- DAs replacing the need for individual coverage, since the combined group amounts exceed the client's calculated need
Correct answer: C) As an additional amount payable only if death or loss is accidental, not as part of general protection
AD&D is conditional. Presenting it as a doubling of coverage overstates protection for the majority of deaths, which are from illness. Its value is real but narrow.
Why the other options are wrong
- AIt has value for accidental deaths.
- BAD&D does not double coverage for all deaths.
- DConditional coverage cannot replace unconditional individual coverage.
Exam tip
Present group AD&D as a bonus for accidental causes only.
Common mistake
Summing basic life and AD&D as the client's total life coverage.
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.