Free LLQP Accident & Sickness Full-Length Practice Exam: 30 Questions

This free full-length LLQP Accident & Sickness practice exam includes 30 original Securities Prep questions across the official LLQP competency areas.

These questions are for self-assessment. They are not official exam questions and do not imply affiliation with any exam sponsor or regulator.

Count note: this page uses the full-length practice count maintained in the Mastery exam catalog. Some regulators and exam providers publish total questions, scored questions, duration, or pilot-item rules differently; always confirm exam-day rules with your licensing body or exam provider.

For concept review before or after this set, use the LLQP Accident & Sickness Study Guide on SecuritiesMastery.com.

Exam snapshot

Full-length exam mix

Practice questions

Questions 1-25

Question 1

Topic: Analyze the Available Products That Meet the Client’s Needs

In a group disability plan, the insurer issues a contract to the plan sponsor and provides employees with a document that outlines key terms such as the waiting period and typical limitations (for example, pre-existing condition and late entrant limitations). What is this employee document called?

• A. Non-evidence maximum (NEM)
• B. Certificate of insurance (certificate)
• C. Waiting period
• D. Master policy

Best answer: B

What this tests: Product Analysis

Explanation: Group disability coverage is set up with a master policy issued by the insurer to the plan sponsor (commonly the employer). Individual employees do not usually receive the full master policy; instead, they receive a certificate (often called a certificate of insurance or benefit booklet) that summarizes how the plan applies to them.

That certificate commonly highlights practical items an employee needs to know, such as the waiting period (also called the elimination period) and common group-plan limitations, including pre-existing condition limitations and late entrant limitations (which may restrict coverage or apply different rules if an employee joins the plan after first becoming eligible).

The employee typically receives a certificate that summarizes the coverage under the group plan, including items like the waiting period and key limitations.

Question 2

Topic: Provide Customer Service During the Validity Period of the Coverage

A client receiving disability income benefits asks whether the benefits will be taxable. The client confirms the employer paid 100% of the disability premiums. Which response is the most appropriate and generally accurate at an LLQP level?

• A. Explain that the benefits are taxable only if the disability was caused by an accident rather than an illness.
• B. Explain that disability benefits are generally tax-free because insurance proceeds are not considered income.
• C. Explain that disability benefits are generally taxable when the employer paid the premiums, and suggest the client confirm their personal tax situation with a tax professional.
• D. Tell the client exactly how much tax will be withheld and how the benefit should be reported on their tax return.

Best answer: C

What this tests: In-force Service

Explanation: During a disability claim, an advisor can support the client by clarifying general concepts, helping with paperwork and communication, and setting realistic expectations—without breaching privacy or providing professional services outside their scope (such as personalized tax advice).

A common, stable principle taught at the LLQP level is that the taxability of disability income benefits often depends on who paid the premiums. When an employer pays the premiums, benefits are generally taxable to the employee. When the employee pays the premiums personally, benefits are commonly received tax-free (at a high level), but the advisor should avoid detailed CRA mechanics and should not guarantee outcomes.

The most appropriate response combines (1) the general rule based on the premium payer and (2) a clear boundary: the client should confirm their specific tax situation with a qualified tax professional.

This provides the correct high-level principle and sets appropriate expectations without giving personalized tax advice or guaranteeing a specific tax outcome.

Question 3

Topic: Analyze the Available Products That Meet the Client’s Needs

Amir owns a small physiotherapy clinic and is reviewing a disability business overhead expense (BOE) policy to understand what it would pay if he becomes disabled.

Exhibit — BOE policy summary (snippet)

Based only on the exhibit, which interpretation is correct?

• A. The policy reimburses any business cash shortfall, including inventory/cost of goods sold and new equipment purchases, for up to 12 months.
• B. The policy replaces Amir’s personal income (owner compensation) up to $12,000 per month as long as he cannot work at all.
• C. The policy begins paying eligible overhead immediately on the first day of disability and continues for up to 30 days.
• D. After Amir has been disabled for 30 days, the policy can reimburse eligible clinic overhead expenses (up to $12,000 per month) for as long as 12 months, provided he meets the policy’s disability definition.

Best answer: D

What this tests: Product Analysis

Explanation: BOE insurance is designed to help keep a business viable when an owner becomes disabled by reimbursing eligible ongoing overhead expenses (for example, rent and utilities) during the disability.

The exhibit shows the basic structure:

• A 30-day elimination period, meaning benefits do not start until the waiting period has been satisfied.
• A maximum monthly benefit ($12,000) that caps what can be reimbursed each month.
• A 12-month benefit period, limiting how long benefits can be paid.
• Coverage tied to a definition of disability (unable to perform material and substantial duties and not working).
• A list of eligible vs. not eligible expenses, making clear this is not personal income replacement and not a blanket “any business expense” policy.

This matches the elimination period, maximum monthly benefit, 12‑month benefit period, and the exhibit’s focus on reimbursing eligible overhead (not owner pay).

Question 4

Topic: Analyze the Available Products That Meet the Client’s Needs

A client has employer short-term disability (STD) that can pay for up to 10 weeks. She also buys an individual disability insurance policy with a 90-day elimination period. She becomes totally disabled today and remains continuously disabled.

Assuming the individual policy does not state any offset or waiting rule tied to employer STD, when would the individual policy generally begin paying benefits?

• A. As soon as the employer STD payments end (after 10 weeks)
• B. Only after the employer’s long-term disability (LTD) plan begins paying
• C. After 90 days of continuous disability, provided she is still disabled
• D. The individual policy would not pay because she is already receiving employer STD

Best answer: C

What this tests: Product Analysis

Explanation: This question tests the elimination period provision and how it interacts (or does not interact) with other income replacement sources.

The elimination period is the time that must pass from the start of disability before disability benefits become payable under that policy. Unless the policy states a special rule (for example, an offset/integration clause or a waiting period that depends on another plan), the elimination period runs based on continuous disability, not on when employer STD ends.

In this scenario, the insured is continuously disabled and the individual policy’s elimination period is 90 days, so the individual policy would generally begin paying after 90 days, assuming she still meets the policy’s definition of disability at that time.

The elimination period is the policy’s waiting period. Once 90 days of continuous disability have passed, benefits can start if the insured still meets the definition of disability.

Question 5

Topic: Analyze the Available Products That Meet the Client’s Needs

Sonia, age 57, is travelling to Spain for 21 days. She has a history of atrial fibrillation and her medication dose was changed 75 days ago. She wants travel medical coverage that would not automatically exclude a claim related to this condition.

Two policies show these features:

• Policy North: pre-existing conditions covered if stable for 60 days
• Policy South: pre-existing conditions covered if stable for 120 days

All other benefits are similar. Which policy is most appropriate based on the deciding factor in this scenario?

• A. Policy South, because it uses a longer stability requirement for pre-existing conditions
• B. Policy North, because Sonia meets its 60-day stability requirement for pre-existing condition coverage
• C. Policy South, because its definition of a medical emergency is typically broader
• D. Policy North, because its maximum trip length is likely better suited to international travel

Best answer: B

What this tests: Product Analysis

Explanation: This question tests a core travel medical comparison: pre-existing condition (stability) coverage. When a client has a medical condition that could plausibly lead to an emergency claim, the agent must compare each policy’s stability requirement and determine whether the client meets it based on the disclosed timeline.

Sonia’s medication dose changed 75 days ago. A policy that requires stability for 60 days is satisfied, while a policy that requires stability for 120 days is not. Since the goal is to avoid the claim being excluded solely due to the pre-existing condition limitation, the stability requirement is the deciding factor.

The key comparison is the stability (pre-existing condition) requirement. Sonia has been stable for 75 days, which satisfies 60 days but not 120 days.

Question 6

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

For an individual disability insurance policy already in force, which event should most clearly prompt the insurance advisor to schedule a coverage review with the client?

• A. The client changes jobs and their day-to-day duties change materially (for example, from office work to physically demanding work).
• B. The client receives their annual policy statement and the policy number changes due to an internal system update.
• C. The client’s family doctor retires and they register with a new clinic.
• D. The insurer issues an updated marketing brochure for the policy series.

Best answer: A

What this tests: Recommendation Implementation

Explanation: Ongoing service in accident & sickness insurance includes proactively reviewing coverage when the client’s situation changes in a way that can create a coverage gap or make the current plan mismatched.

A material change in occupation or job duties is one of the clearest review triggers for disability insurance because DI is closely tied to what the client does to earn income. A job change can also come with changes to income, employer group benefits (STD/LTD, extended health/dental), and overall affordability—any of which can affect the appropriate benefit amount and coverage design.

Administrative or informational changes (like brochure updates or internal policy-number changes) usually do not indicate a change in the client’s needs. A change in family doctor, on its own, is not a reliable indicator that coverage suitability has changed.

A material occupation/duties change can affect suitability (benefit amount needed, ability to perform the occupation, and how the policy aligns with the new risk). It is a key review trigger during the policy period.

Question 7

Topic: Analyze the Available Products That Meet the Client’s Needs

Nora works full-time for an employer that provides 10 paid sick days and a group long-term disability (LTD) plan with a 17-week elimination period. Her employer does not provide short-term disability (STD). Nora asks what income sources would typically apply, and in what order, if she is unable to work due to illness for 8 months. You confirm she may be eligible for EI sickness benefits, which are payable for a limited number of weeks.

Which recommendation best sets expectations about sequencing and coverage?

• A. She would typically use employer paid sick leave first, then EI sickness benefits during the LTD elimination period, and then LTD if she is still disabled after the elimination period.
• B. She would typically rely on LTD right away because LTD is designed to replace income from the first day she is off work.
• C. She should apply for EI sickness benefits immediately and save her employer sick days for later; LTD would start when EI sickness benefits end.
• D. She should plan to rely on EI sickness benefits for the full 8 months, because EI sickness benefits continue as long as she remains disabled; LTD would not be relevant.

Best answer: A

What this tests: Product Analysis

Explanation: This question tests how to compare common income-replacement “layers” and their typical sequencing when a client becomes disabled.

In general, the first dollars available are often the employer’s paid sick leave (if any). After sick leave ends, the next source depends on what the employer provides. If there is no employer STD plan, EI sickness benefits may be the next short-term income source (if the client is eligible), but EI sickness benefits are payable only for a limited number of weeks. LTD is designed for longer-duration disabilities and typically starts only after its elimination period has been satisfied (here, 17 weeks).

This reflects typical sequencing: paid sick leave first, then a short-term income source (EI sickness when no STD exists), then LTD after the stated elimination period if disability continues.

Question 8

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

Sonia is applying for individual disability insurance. The insurer will request medical reports from two providers:

• Family doctor report fee: $85
• Chiropractor report fee: $60

Sonia will be responsible for these fees. Before ordering the reports, the agent must obtain Sonia’s informed consent and authorization and confirm the total amount she may have to pay. What total fee should the agent disclose (assume no taxes)?

• A. $150
• B. $170
• C. $145
• D. $125

Best answer: C

What this tests: Recommendation Implementation

Explanation: When implementing A&S coverage, an agent should not request medical information (or order third-party medical reports) without the client’s informed consent and the necessary authorization to collect and share that information.

In practice, informed consent also includes explaining practical implications such as third-party report fees the client may have to pay. Here, the client’s potential cost is simply the sum of the two stated fees: $85 + $60 = $145.

This equals $85 + $60. Disclosing the expected total supports informed consent before authorizing the release of medical information and ordering reports.

Question 9

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

A 25-employee Ontario construction firm wants to add a group extended health and short-term disability plan. The owner asks you to “tell us what the law requires” and to draft wording for an employee memo about eligibility, waiting periods, and how claims work. As the insurance advisor, what is the most appropriate next step?

• A. Draft a custom eligibility and termination clause for the sponsor to insert into their employment contracts so the plan rules are enforceable.
• B. Proceed directly to enrollment and tell employees to read the booklet and contact the insurer if they have questions about eligibility and claims.
• C. Confirm the legal minimum benefits required in Ontario and recommend a plan that meets those statutory requirements exactly.
• D. Provide plan design options and use insurer/administrator template materials to help the sponsor communicate plan rules in plain language, while referring any “what the law requires” questions to the sponsor’s legal/HR resources.

Best answer: D

What this tests: Recommendation Implementation

Explanation: This scenario tests how an advisor implements a group A&S recommendation by supporting the plan sponsor with plan design and clear communications, while avoiding legal advice.

A sponsor can legitimately ask for help understanding:

• plan options (what the insurer offers)
• how eligibility and waiting periods work under the plan
• how to access claims/service and what documents are typically needed
• how to explain coordination concepts at a high level (if included)

However, “what the law requires” is a request for legal interpretation. A prudent advisor should stay in scope: provide insurance education and communication support using insurer/administrator materials, and direct legal/compliance questions to the sponsor’s legal/HR professionals.

This supports plan design and member education while staying in scope: you explain plan options and how the plan works, but you do not give legal advice.

Question 10

Topic: Assess the Client’s Needs and Situation

Sana is 62 and plans to retire within 2 years. Her mother and an older sibling both required significant help with daily activities later in life. Sana wants to preserve choice (home care vs facility) and avoid relying on her adult daughter, who lives in another province.

Review the excerpt below from Sana’s current employer extended health plan.

Based only on the exhibit, what is the most accurate interpretation for Sana’s long-term care planning needs?

• A. Her plan’s home nursing maximum of $3,000 per year means she can expect $3,000 per month of long-term care support if she becomes dependent.
• B. Her plan covers assisted living and long-term care facility charges once provincial health insurance stops paying, so she only needs to budget for the first few months.
• C. Her plan will cover most long-term care costs as long as the care is provided at home, so she likely does not need additional planning.
• D. Her plan provides limited reimbursement for skilled home nursing, but it does not cover ongoing custodial care or long-term care facility costs, so a loss of independence could create a major out-of-pocket and caregiving burden.

Best answer: D

What this tests: Needs Analysis

Explanation: This item tests needs assessment for long-term care (LTC) planning by interpreting what an existing health plan does—and does not—cover. Long-term care needs are often driven by a loss of independence (help with activities of daily living), which can create two related burdens:

• Financial burden: ongoing costs for custodial care at home or facility charges may not be insured under typical extended health plans.
• Caregiving burden: if custodial care is not funded, families may need to provide time and coordination, which is harder when family lives far away.

In the exhibit, the only relevant coverage is limited reimbursement for skilled home nursing, capped annually. The exhibit explicitly excludes personal support/custodial care and facility charges—key LTC cost drivers—indicating a significant gap that warrants LTC planning if Sana wants choice and less reliance on family.

The exhibit shows a low annual maximum for home nursing and explicitly states no coverage for custodial care or facility charges—exactly the types of costs that often arise with loss of independence.

Question 11

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

In the typical implementation timeline for an individual accident & sickness (A&S) policy, which policy element is primarily used during underwriting to help the insurer decide whether to approve the application and on what terms?

• A. Waiver of premium benefit
• B. Evidence of insurability (e.g., medical, occupational, and income information)
• C. Elimination period
• D. Residual (partial) disability benefit

Best answer: B

What this tests: Recommendation Implementation

Explanation: For individual A&S coverage, implementation usually follows this sequence:

• Application: the client applies and answers health/occupation/income questions.
• Underwriting: the insurer assesses risk and may request evidence of insurability (for example, medical evidence, an attending physician statement, and/or income and occupational verification).
• Decision and issue: the insurer approves as applied, approves with changes (such as rating or exclusions), or declines, and then issues the policy when approved.
• Delivery/acceptance: the advisor reviews key terms with the client and confirms acceptance (and any required premium arrangements) so coverage can take effect as described in the contract.

The element that specifically “powers” underwriting is evidence of insurability—it is the supporting information used to make the insurer’s decision.

Underwriting is the risk-assessment stage, and evidence of insurability is the information the insurer uses to decide accept/decline and any terms such as exclusions or rating.

Question 12

Topic: Assess the Client’s Needs and Situation

An advisor completes a disability insurance needs analysis for Maya, who is a salaried employee with a mortgage and one child. They reviewed her employer sick leave and group LTD, estimated her monthly income shortfall, and discussed two benefit amounts and two elimination periods.

Which file note practice is INCORRECT because it reduces suitability support and auditability?

• A. Recording the key facts relied on (income, essential expenses, existing employer benefits) and the assumptions used to estimate the shortfall
• B. Keeping the file note high-level and avoiding mention of alternatives or client reasons, so there is less detail on record if a complaint occurs
• C. Documenting the alternatives discussed (including options Maya declined) and the client’s decision and stated reasons
• D. Noting the calculation used to estimate the monthly shortfall and keeping a brief rationale linking the recommended benefit and elimination period to Maya’s priorities

Best answer: B

What this tests: Needs Analysis

Explanation: This question tests proper documentation of a needs analysis to support suitability and auditability (client-first and compliance expectations).

A strong A&S file note should let a third party understand:

• what was learned in fact-finding (income, expenses, dependents, existing sick leave/STD/LTD);
• what was calculated or estimated (for example, the income shortfall);
• what options were presented and compared (benefit amounts, elimination periods);
• why the recommendation fits the client’s priorities and constraints; and
• what the client decided (including any declines) and why.

Intentionally keeping notes vague to reduce “paper trail” risk is the opposite of good practice. It weakens suitability support and creates problems if the client later misunderstands what was recommended or why.

Avoiding details to “protect” the file undermines suitability evidence and makes the advice harder to audit and defend.

Question 13

Topic: Provide Customer Service During the Validity Period of the Coverage

For a typical Canadian disability insurance plan, which statement is generally correct about the taxability of disability benefits based on who paid the premiums?

• A. Disability benefits are always non-taxable in Canada, regardless of who paid the premiums.
• B. If the employer paid the premiums, disability benefits are generally taxable to the employee; if the employee paid premiums with after-tax dollars, benefits are generally non-taxable.
• C. Disability benefits are taxable only when the disability results from an accident; benefits from illness are non-taxable.
• D. If the employer paid the premiums, disability benefits are generally non-taxable; if the employee paid premiums with after-tax dollars, benefits are generally taxable.

Best answer: B

What this tests: In-force Service

Explanation: A key proactive client-education point during ongoing service is setting expectations about net disability income. A commonly taught Canadian principle is that disability benefit taxability often depends on who paid the premiums:

• When the employer pays (or the premium is paid with pre-tax dollars), the disability benefits are generally taxable income to the employee.
• When the employee pays premiums personally with after-tax dollars, the disability benefits are generally non-taxable.

This is why an advisor should encourage clients to confirm how their group plan premiums are funded (especially before changing jobs or relying on a group LTD plan), so there are fewer surprises at claim time.

This is the common high-level principle used in client education: premium payer often drives whether benefits are taxable.

Question 14

Topic: Analyze the Available Products That Meet the Client’s Needs

Rita is comparing her employer’s group long-term disability (LTD) coverage to an individual disability policy you discussed. She shows you an employee benefit booklet that summarizes LTD, but it does not clearly state the definition of disability used to qualify for benefits. Rita asks you to “confirm what my LTD contract really says.” What is the most appropriate next step?

• A. Proceed with a recommendation based on the booklet’s summary and avoid requesting any additional documents to reduce delays.
• B. Treat the employee benefit booklet as the binding contract because it is what employees receive and rely on.
• C. Have Rita call the insurer directly and request that the insurer change the definition of disability to match the individual policy you discussed.
• D. Ask the plan sponsor’s benefits administrator (or the insurer/administrator) for the master policy wording or written confirmation of the LTD definition from the master policy.

Best answer: D

What this tests: Product Analysis

Explanation: This question tests how a group benefits plan is structured and which document has contract authority.

In most group A&S plans, the employer (the plan sponsor) is the policyholder and has the contract with the insurer/administrator through a master policy. Employees are plan members and typically receive an employee certificate or benefit booklet, which is commonly a summary of the plan’s provisions. When a key term (like the definition of disability) is unclear from the booklet, the appropriate process step is to obtain the master policy wording (or written confirmation that references the master policy) before making a definitive comparison or recommendation.

This protects the client from relying on a summary that may omit important qualifiers, and it keeps the advisor’s analysis accurate and defensible.

In a group plan, the employer (plan sponsor) holds the contract via the master policy. The booklet/certificate is usually a summary, so you should confirm the exact wording from the master policy (or a written statement referencing it).

Question 15

Topic: Assess the Client’s Needs and Situation

Maya is a salaried employee with no group LTD. She says, “If I get sick and can’t work, I’ll just use EI sickness benefits, so I don’t think I need disability insurance.” As her insurance advisor, what is the most appropriate next step?

• A. Explain that EI sickness benefits are temporary (time-limited, such as up to 26 weeks) and then fact-find to quantify her income/expense gap and need for longer-term disability coverage.
• B. Tell her EI sickness benefits can replace her income for as long as she remains medically unable to work, so additional disability coverage is unnecessary.
• C. Proceed directly to a disability insurance application using a standard benefit amount without further fact-finding, to ensure coverage is in place quickly.
• D. Advise her to apply for EI sickness benefits first and only discuss disability insurance if EI denies the claim.

Best answer: A

What this tests: Needs Analysis

Explanation: This question tests needs assessment (C1) and a key Canadian reality: EI sickness benefits provide temporary income support when a person is medically unable to work, and they are time-limited (often framed as up to 26 weeks).

When a client says they will “just use EI sickness,” the advisor’s next step is not to jump to an application or to wait for a denial. The advisor should first correct the misconception (EI is short term), then perform basic fact-finding to understand the potential income interruption risk beyond the EI period—for example, essential monthly expenses, emergency savings, dependents, and any employer sick leave or other coverage.

This addresses a common misunderstanding: EI sickness benefits are short term. The advisor should then assess the client’s situation to determine whether additional disability income protection is needed beyond the EI period.

Question 16

Topic: Assess the Client’s Needs and Situation

A client with Canada’s publicly funded provincial/territorial health coverage buys a private supplementary health plan. Later, the client has a medically necessary visit with a physician in Canada and submits the bill to the private plan. What is the most likely coverage outcome?

• A. The private plan pays first and the public plan pays any remaining balance, so the client can choose which plan is primary.
• B. Both the public plan and the private plan pay the full amount, allowing the client to receive more than the actual expense.
• C. The private plan replaces public coverage for physician services once the client is insured, so the private plan becomes the primary payor.
• D. The public plan generally pays for medically necessary physician services, so the private plan typically pays nothing unless there is an eligible expense the public plan does not cover.

Best answer: D

What this tests: Needs Analysis

Explanation: In Canada, provincial/territorial public health insurance generally covers medically necessary hospital and physician services. Private supplementary health insurance is typically designed to fill gaps in public coverage—such as prescription drugs (outside hospital), dental, vision, paramedical services (e.g., physiotherapy, massage), medical supplies, and sometimes hospital “extras” (e.g., semi-private/private room upgrades).

So if a client incurs an expense that is normally covered by the public plan (like a medically necessary physician visit in Canada), a private supplementary plan will usually not duplicate that payment. It may only respond if there is a separate, eligible portion that the public plan does not cover.

Provincial/territorial plans generally cover medically necessary hospital and physician services. Supplementary plans are designed mainly to cover gaps such as drugs, dental, vision, paramedical services, or upgrades.

Question 17

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

In a typical employer-sponsored group accident and sickness plan, which policy element is the legal contract that sets out the full terms of coverage and names the insurer and the plan sponsor (employer/association) as the contracting parties?

• A. The member certificate or benefit booklet
• B. The claims form and supporting medical forms
• C. The employee’s enrollment (application) form
• D. The group plan’s master contract (master policy)

Best answer: D

What this tests: Recommendation Implementation

Explanation: Group accident and sickness coverage is usually set up with two main documents:

• The master contract (master policy): the legal agreement between the insurer and the plan sponsor (typically the employer or an association). It contains the complete terms and conditions of the plan (benefits, eligibility rules, limitations, termination provisions, etc.).
• The member certificate/benefit booklet: a document given to each covered employee/member that summarizes the coverage available under the master contract and explains how members access benefits.

For advising and implementation, an agent should know that the master contract governs the plan, while members rely on their certificate/booklet for a practical summary and instructions—often with a note that the master contract is controlling if there is a discrepancy.

The master contract is the legal contract issued to the plan sponsor and contains the complete terms, including eligibility, benefits, limitations, and the parties to the contract.

Question 18

Topic: Assess the Client’s Needs and Situation

Ravi, age 45, is applying for an individual long-term disability (LTD) policy. He works as an office manager, is a non-smoker, and has two children. In the fact-find, he mentions he went to the ER 3 months ago for chest pain and is now seeing a cardiologist while waiting for test results. Which fact is most likely to affect underwriting acceptability or trigger additional medical evidence requests?

• A. He has two dependent children.
• B. He had recent chest pain and is currently under investigation by a cardiologist.
• C. He is a non-smoker.
• D. He works in an office job (low physical risk).

Best answer: B

What this tests: Needs Analysis

Explanation: This question tests identifying underwriting-relevant facts during a structured fact-find. For disability insurance, insurers focus on both occupational risk and medical risk. A recent medical event with ongoing investigation (like chest pain with pending cardiology tests) is especially significant because the outcome is uncertain and could indicate a condition that increases the probability of a claim.

In practice, an advisor should flag unresolved medical investigations early. This helps set expectations that underwriting may request additional details (for example, physician records) or may delay a decision until the condition is clarified.

A recent, unresolved medical issue is a key underwriting red flag and commonly leads to additional medical evidence and/or a postpone decision until results are known.

Question 19

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

Sofia (age 34) is self-employed and has applied for an individual disability insurance policy. Her income is seasonal, and she is worried she might forget a payment during busy periods. She wants the simplest way to keep the policy in force and wants to understand what happens if a payment is missed.

What is the BEST recommendation to address Sofia’s concern?

• A. Advise her to avoid automatic payments and instead wait for the insurer to call or mail reminders before making each payment, because this prevents any risk of lapse.
• B. Set up pre-authorized debit (automatic withdrawals) and explain that a missed payment usually triggers a short grace period; if not paid, the policy can lapse and coverage may stop, and reinstatement may require insurer approval and repayment of overdue premiums.
• C. Recommend paying annually by cheque to reduce cost and explain that if she misses the annual payment, the insurer will automatically keep coverage active until the next policy anniversary.
• D. Tell her to pay only when cash flow allows and reassure her that disability policies remain in force even if premiums are skipped for a few months.

Best answer: B

What this tests: Recommendation Implementation

Explanation: This scenario tests implementation guidance around premium payment methods and what to communicate about missed premiums.

A practical way to help a client avoid an accidental lapse is to use an automatic payment method (such as pre-authorized debit) that aligns with their budgeting habits. As part of proper policy delivery/implementation, the agent should also set expectations about what generally happens if a premium is missed:

• A missed premium typically starts a grace period (a short time to catch up without immediate termination).
• If the premium is not paid by the end of the grace period, the policy can lapse, meaning coverage may end.
• Getting coverage back usually involves reinstatement, which may require insurer approval and paying overdue premiums; it is not guaranteed, and a claim during a lapse may not be payable.

The best recommendation is the one that both reduces the chance of a missed payment and explains these consequences clearly and conceptually.

Automatic payments reduce the chance of an unintentional missed premium, and the explanation accurately describes the key concepts: grace period, lapse, and reinstatement (which is not guaranteed).

Question 20

Topic: Assess the Client’s Needs and Situation

In Canada, which statement best describes the general income tax treatment of group long-term disability (LTD) benefits when the employer pays 100% of the premiums?

• A. The LTD benefits are generally non-taxable because the premiums were not paid by the employee.
• B. The LTD benefits are generally non-taxable as long as the disability is caused by an accident rather than an illness.
• C. The LTD benefits are generally taxable only if the employee can claim the LTD premiums as a personal tax deduction.
• D. The LTD benefits are generally taxable to the employee when received.

Best answer: D

What this tests: Needs Analysis

Explanation: Accident & sickness insurance (especially disability insurance) is used in personal risk management to transfer part of the financial risk of illness or injury—most notably the risk of income interruption.

When estimating how much income protection a client needs, it is not enough to look only at the gross monthly benefit. An advisor should also consider whether benefits are likely to be received taxable or non-taxable, because that affects the client’s net replacement income available to pay essential expenses.

A common, stable planning principle in Canada is:

• If premiums are paid by the employer, disability benefits from that plan are generally taxable to the employee.
• If premiums are paid by the employee with after-tax dollars, benefits are generally non-taxable.

This helps position A&S insurance within broader financial planning: it supports budgeting, emergency-fund planning, and deciding whether additional individual coverage is needed to close a net-income gap.

When the employer pays the premiums, the benefit is typically treated as taxable income to the employee. This is a common planning consideration when estimating net replacement income.

Question 21

Topic: Analyze the Available Products That Meet the Client’s Needs

Priya and Mark co-own a small marketing agency (50/50). Their lawyer drafted a buy-sell agreement that requires the active owner to purchase the disabled owner’s shares if disability prevents the disabled owner from working long term. They ask what disability buyout insurance is meant to fund.

Which statement about disability buyout insurance is INCORRECT?

• A. It is designed to provide funds to complete the ownership purchase required by the buy-sell agreement when an owner becomes disabled.
• B. It is different from business overhead expense insurance, which is intended to help pay ongoing operating costs while the owner is disabled.
• C. It can help the remaining owner avoid draining business cash flow or taking on debt to buy the disabled owner’s shares.
• D. It is primarily meant to reimburse the business for rent, payroll, and utilities during the owner’s disability so the business can keep operating.

Best answer: D

What this tests: Product Analysis

Explanation: Disability buyout insurance is used to fund a buy-sell agreement when an owner becomes disabled and cannot continue working long term. The goal is ownership transfer funding: providing cash so the remaining owner(s) (or the business, depending on the agreement structure) can purchase the disabled owner’s shares at the agreed value/terms.

This is different from operating expense funding, which is the purpose of business overhead expense (BOE) insurance. BOE coverage is designed to help cover ongoing fixed business expenses (like rent, utilities, and certain payroll costs) while an owner is disabled, so the business can keep running.

In the scenario, Priya and Mark’s need is to ensure the buy-sell obligation can be executed without forcing the active owner to liquidate assets, deplete cash flow, or borrow heavily.

Paying ongoing operating expenses is the role of business overhead expense coverage, not disability buyout insurance, which targets funding the ownership transfer under a buy-sell agreement.

Question 22

Topic: Assess the Client’s Needs and Situation

Nina (age 39) earns $5,200/month after tax. Her partner earns $2,400/month after tax and would continue working if Nina became disabled. Nina’s monthly expenses are: mortgage $2,300, utilities $350, groceries $850, car payment/insurance $600, childcare $700, minimum debt payments $300, and discretionary spending $600. She has $7,000 in savings and only 5 paid sick days at work (no group LTD). She asks how much disability insurance she should buy and what elimination period makes sense.

What is the most appropriate next step for the agent?

• A. Start the disability insurance application and order medical evidence immediately to avoid delays; the benefit amount and elimination period can be selected after underwriting.
• B. Build a simplified disability budget by separating essential expenses from discretionary, estimate Nina’s monthly cash-flow shortfall using the partner’s income, and compare it to savings and sick days to choose a benefit amount and elimination period.
• C. Recommend the longest elimination period available to reduce premium, because the partner’s income should cover the household temporarily.
• D. Assume provincial health coverage will handle most costs during a disability, so focus the recommendation on a minimal benefit amount.

Best answer: B

What this tests: Needs Analysis

Explanation: This question tests cash-flow needs analysis for disability insurance and the workflow step that comes before product selection.

A practical DI recommendation starts with a simplified budget:

• Identify essential monthly expenses (housing, utilities, food, debt minimums, transportation, childcare).
• Decide what income would still be available if the client were disabled (for example, a working partner’s net income).
• Estimate the monthly shortfall that DI should help cover.
• Compare that shortfall to resources that can fund the elimination period (savings/emergency fund and any paid sick leave).

Only after this cash-flow picture is clear should the agent recommend a benefit amount and elimination period that match the client’s ability to absorb a waiting period and pay premiums.

This is the core needs-analysis step: estimate the monthly shortfall that DI must cover and assess how long existing resources can cover the waiting period.

Question 23

Topic: Assess the Client’s Needs and Situation

Two spouses each have extended health and dental coverage through their employers, and each plan also covers the other spouse as a dependent. How does coordination of benefits typically work for a claim for the spouse’s own eligible prescription drug expense?

• A. The claim must be submitted only to the plan with the higher annual maximum; the other plan will not pay anything.
• B. The spouse submits the claim to their own plan first, then submits any unpaid balance to the other spouse’s plan (if eligible).
• C. The spouse can choose either plan to be primary for any claim as long as both plans cover the expense.
• D. Each plan pays 50% of the eligible expense from the start, regardless of the plan terms.

Best answer: B

What this tests: Needs Analysis

Explanation: Coordination of benefits (COB) is the process used when an individual is covered under more than one health/dental plan. The goal is to coordinate payments so the claimant can be reimbursed up to the maximum eligible amount for covered services (subject to each plan’s terms), while avoiding duplicate payment.

For spouses, the core role concept is that the plan covering a person as an employee/member is typically primary for that person’s claims. If the person is also covered as a dependent under their spouse’s plan, that spouse’s plan is typically secondary and may consider any remaining eligible balance after the primary plan pays.

This reflects the core primary/secondary payer logic: a person’s own employee plan is typically primary for that person, with the other spouse’s plan acting as secondary for remaining eligible amounts.

Question 24

Topic: Implement a Recommendation Adapted to the Client’s Needs and Situation

Priya applies for an individual disability insurance policy. In your meeting notes, she asked for a 30-day elimination period because she has limited savings. After submitting the e-application, you notice the application was completed with a 90-day elimination period by mistake.

Which action is INCORRECT?

• A. Submit a documented request to the insurer to correct the elimination period, understanding it may affect premium and could require additional underwriting review.
• B. Contact Priya promptly, explain the error, and obtain her confirmation of the desired elimination period before requesting a formal change with the insurer.
• C. Edit the elimination period in your copy of the application file and wait to see what the insurer issues, since the insurer can “fix it at issue.”
• D. If the policy is issued with the wrong elimination period, do not complete delivery as “accepted as applied for”; instead, explain the mismatch and request a correction/re-issue so the delivered contract matches Priya’s needs.

Best answer: C

What this tests: Recommendation Implementation

Explanation: This scenario tests implementation and documentation of options at application, and how correcting an error protects the client and the advisor. The elimination period is a core disability insurance option that directly affects how soon benefits could start and usually affects premium. If the wrong elimination period is submitted or issued, the advisor should act quickly, be transparent with the client, and use the insurer’s documented amendment/change process.

A key principle at the LLQP level is that an advisor should not “informally” fix material application errors. The insurer must evaluate and accept changes, and the client must clearly agree to the corrected option. If the error is discovered at delivery, the delivery conversation is the moment to verify the schedule and ensure the contract being delivered matches what the client intended to buy.

Altering your file copy does not correct what was actually applied for. Changes to a key option like an elimination period must be disclosed, agreed to by the client, and accepted by the insurer through a documented amendment or re-issue process.

Question 25

Topic: Assess the Client’s Needs and Situation

Which statement best describes how Canada’s publicly funded provincial/territorial health plans typically interact with private supplementary health insurance for a client’s medical expenses?

• A. Private supplementary health insurance replaces provincial/territorial health coverage, so clients use their private plan first for hospital and physician services.
• B. Provincial/territorial plans generally cover prescription drugs, dental, and vision for most working-age adults, so private supplementary coverage is usually unnecessary.
• C. Public plans generally cover medically necessary hospital and physician services, while private plans often help pay for services and items not fully covered (for example, prescription drugs, dental, or vision).
• D. Public coverage is limited to emergencies only, so private supplementary insurance is needed for most routine doctor visits and planned surgeries.

Best answer: C

What this tests: Needs Analysis

Explanation: In Canada, provincial/territorial health insurance plans (the publicly funded plans) are designed to cover the core “medically necessary” services delivered by physicians and hospitals. Many other health-related costs that clients regularly face are not covered, are only partially covered, or vary by plan and situation.

Private supplementary health insurance (through an employer group plan or an individual plan) is commonly used to help pay for those gaps. Typical examples include prescription drugs, dental services, vision care, and other extended health expenses (for example, paramedical services), depending on the plan design.

For needs assessment, the key point is to distinguish between:

• Core services that are generally covered by public plans (hospital/physician, medically necessary)
• Out-of-pocket exposures where private supplementary coverage often adds value (drugs, dental, vision, and other extended health items)

This reflects the common “base + supplementary” structure in Canada: provincial/territorial plans cover core medically necessary hospital and physician care, and private coverage often fills predictable gaps such as drugs and dental.

Questions 26-30

Question 26

Topic: Assess the Client’s Needs and Situation

Samira, age 34, is self-employed and wants disability insurance to protect her income. She says she can “handle the first little while” if she is off work, and she wants to keep premiums affordable. You are considering whether a shorter or longer elimination period makes sense.

What is the most appropriate next step before recommending an elimination period?

• A. Recommend the shortest elimination period available to avoid any gap, and revisit affordability after underwriting
• B. Start the application and book any medical evidence requirements so coverage can be issued sooner
• C. Quantify her liquid emergency savings (and other readily available funds) and estimate how long they could cover essential monthly expenses during a disability
• D. Focus first on selecting a long benefit period (such as to age 65), since elimination period is a minor pricing detail

Best answer: C

What this tests: Needs Analysis

Explanation: This question tests needs assessment for disability income planning: choosing an elimination period should be grounded in how long the client can cover essential expenses without the disability benefit.

A practical way to do this is to confirm the client’s liquid emergency fund (cash, savings, readily accessible investments, available credit they are willing/able to use) and compare it to essential monthly expenses. If the client can reasonably self-fund the first 30–90 days (or longer), a longer elimination period may be suitable and more affordable. If they cannot, a shorter elimination period (or other short-term protection) may be necessary to avoid a gap.

Because Samira is self-employed and wants premiums kept affordable, tying the elimination period to her actual emergency savings is the key next step before making a recommendation.

Elimination period selection should be tied to how long the client can realistically self-fund essential expenses using liquid assets and any short-term income sources. Confirming the emergency fund size is key fact-finding.

Question 27

Topic: Analyze the Available Products That Meet the Client’s Needs

Jordan is a new full-time employee. The group benefits booklet says LTD coverage begins after a 3-month waiting period, but the employee must be actively at work on the effective date; otherwise coverage starts the day they return to active work. Jordan’s LTD effective date would be May 1, but he is off work on May 1 due to a back injury.

Which factor is most likely to affect whether his LTD coverage becomes effective on May 1?

• A. Because he is a new hire, LTD cannot begin until he completes 12 months of service
• B. His occupation class determines he must complete medical evidence before any LTD can start
• C. He is not actively at work on the date LTD would otherwise take effect
• D. His back injury automatically makes him uninsurable for group LTD

Best answer: C

What this tests: Product Analysis

Explanation: This question tests group plan eligibility and plan-class rules, specifically the active-at-work requirement.

Group disability benefits commonly have both:

• A waiting period (how long the employee must work before becoming eligible), and
• An active-at-work condition (the employee must be actively performing their job on the day coverage would otherwise become effective).

If the plan states that coverage is delayed when an employee is not actively at work on the effective date, then being off work due to illness or injury is the key factor that affects whether coverage actually starts on that date. The employee’s medical condition may be relevant later (for example, to a claim or to evidence-of-insurability if required), but the scenario’s decisive rule is the active-at-work condition.

Many group plans require the employee to be actively at work on the effective date. If not, coverage is typically delayed until the employee returns to active work, as stated in the booklet.

Question 28

Topic: Analyze the Available Products That Meet the Client’s Needs

In extended health and dental group insurance, what is the main purpose of coordination of benefits (COB) when a person is covered under more than one plan?

• A. To ensure the plan that pays first always pays 100% of the expense and the second plan pays nothing
• B. To allow the person to collect full reimbursement from each plan as long as both premiums are paid
• C. To ensure the total reimbursement from all plans does not exceed the eligible expense incurred
• D. To require the person to choose one plan and cancel the other plan before any claims can be paid

Best answer: C

What this tests: Product Analysis

Explanation: Coordination of benefits (COB) is a method used when an insured person has more than one extended health/dental plan (for example, their own employer plan plus coverage as a spouse/dependent under their partner’s plan). The core principle is that the person should not receive more in total reimbursements than the amount of the eligible expense.

COB determines how the plans work together so that one plan pays first and the other plan may pay some or all of the remaining eligible balance, up to the total eligible amount. This prevents “double-dipping” while still allowing the person to take advantage of multiple coverages to reduce out-of-pocket costs.

COB is designed to prevent duplicate reimbursement so the person is not paid more than the expense that qualifies under the plans.

Question 29

Topic: Assess the Client’s Needs and Situation

Maya earns $6,000 per month gross (about $4,500 net). Her essential monthly expenses are $4,000. Her employer provides a group LTD benefit equal to 60% of gross income ($3,600/month), and her HR department confirms the employer pays the premiums, so any LTD benefits would be taxable and would net about $2,700 per month.

Maya asks how much additional disability coverage she should consider so she can still cover her essential expenses if she becomes disabled. What is the most appropriate recommendation?

• A. Apply for an individual DI benefit of $4,000 per month, ignoring the group LTD benefit so she fully covers expenses.
• B. Estimate the shortfall on an after-tax basis and consider an individual DI top-up of about $1,300 per month to bring her net income close to $4,000.
• C. Rely on the group LTD benefit only, because taxes are settled later and benefit needs should be based on the $3,600 gross amount.
• D. Consider an individual DI top-up of about $400 per month, because $4,000 of expenses minus $3,600 of group LTD equals $400.

Best answer: B

What this tests: Needs Analysis

Explanation: When disability benefits are taxable, the client’s effective income replacement is the after-tax (net) amount, not the gross benefit shown in a group plan booklet. The need should be evaluated by comparing:

• The client’s essential monthly expenses (or desired net income), to
• The estimated net benefit the client would actually receive.

Here, essential expenses are $4,000/month and the taxable group LTD benefit is expected to net about $2,700/month, so the relevant shortfall is about $1,300/month. A suitable “top-up” amount should be based on that net gap (subject to affordability and any coordination/integration rules, if applicable).

This uses the net (after-tax) amount she would actually receive from taxable group LTD (about $2,700) and compares it to the $4,000 of essential expenses, producing an after-tax gap of about $1,300.

Question 30

Topic: Provide Customer Service During the Validity Period of the Coverage

Maria has an individual disability insurance policy with a 90-day elimination period. She was on claim for 8 months, returned to full-time work, then 10 weeks later stopped working again due to the same medical condition.

Her policy says: “If disability from the same or related cause recurs within 6 months after returning to full-time work, it will be treated as a continuation of the prior disability (no new elimination period).”

Which statement is INCORRECT?

• A. She should contact the insurer promptly and be prepared to provide updated medical information and work-status details.
• B. Because the relapse is within 6 months and from the same cause, it may be treated as a continuation without a new elimination period.
• C. She must start a brand-new claim and complete another 90-day elimination period, even if the relapse is within 6 months and from the same cause.
• D. If it is treated as a continuation, the benefit period is generally tied to the original claim rather than restarting from the relapse date.

Best answer: C

What this tests: In-force Service

Explanation: A recurrent (or recurrence) disability provision explains what happens when a claimant returns to work and then becomes disabled again shortly afterward. At a high level, if the relapse is from the same (or related) cause and happens within a stated time window after returning to work, the policy may treat the relapse as a continuation of the prior disability.

Why it matters: it can prevent the claimant from being “penalized” for attempting to return to work—often by avoiding a new elimination period and by continuing the same claim’s benefit period rather than restarting the clock.

In this scenario, the policy wording is provided and the relapse occurs 10 weeks after returning to full-time work, which is within 6 months, and it is the same condition. That fits the stated recurrence conditions.

This contradicts the stated recurrence provision, which says no new elimination period applies when the recurrence conditions are met.

Continue with full practice

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Focused topic pages

• LLQP Accident & Sickness: Needs Analysis
• LLQP Accident & Sickness: Product Analysis
• LLQP Accident & Sickness: Recommendation Implementation
• LLQP Accident & Sickness: In-Force Service

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