LLQP Accident & Sickness: Needs Analysis

Topic snapshot

Sample questions

These questions are original Securities Prep practice items aligned to this LLQP competency area. They are designed for self-assessment and are not official exam questions.

Question 1

Topic: Assess the Client’s Needs and Situation

Priya has 6 weeks of paid sick leave, followed by 15 weeks of employer short-term disability (STD). She has no long-term disability (LTD). Her doctor expects a non-work-related illness will keep her off work for about 18 months.

Using 4 weeks = 1 month and rounding to the nearest month, approximately how many months would remain after employer income replacement ends, and which program is designed to provide longer-term income support if she is eligible and the disability is severe and prolonged?

• A. About 13 months, and CPP disability (CPP-D)
• B. About 10 months, and workers’ compensation
• C. About 10 months, and CPP disability (CPP-D)
• D. About 13 months, and EI sickness benefits

Best answer: A

What this tests: Needs Analysis

Explanation: This question tests two related needs-assessment ideas:

• Estimating an income replacement gap using the client’s existing employer benefits.
• Recognizing that CPP disability (CPP-D) is meant to provide longer-term income support for eligible contributors whose disability is severe and prolonged.

Calculation (using the question’s rule 4 weeks = 1 month):

• Total time off work: 18 months
  • 18 months × 4 weeks/month = 72 weeks
• Employer income replacement: 6 weeks sick leave + 15 weeks STD = 21 weeks
• Remaining time without employer replacement: 72 − 21 = 51 weeks
  • 51 ÷ 4 = 12.75 months, which rounds to about 13 months

That remaining period is the longer-term exposure the advisor should flag. CPP-D (if the client meets eligibility and the disability is severe and prolonged) is the program described as providing longer-term income support.

18 months is about 72 weeks. Employer coverage totals 21 weeks (6 + 15), leaving 51 weeks, which is about 12.75 months (≈ 13 months). CPP-D is intended for longer-term support for eligible contributors with severe and prolonged disability.

Question 2

Topic: Assess the Client’s Needs and Situation

Which statement best describes the income support feature of EI sickness benefits that an advisor should consider when assessing a client’s disability income gap?

• A. They provide long-term income replacement until retirement age for any disabling condition.
• B. They provide temporary income support during medical incapacity for up to 26 weeks.
• C. They replace income only for injuries that occur at work and are coordinated through a workplace injury system.
• D. They reimburse medical and paramedical expenses not covered by a provincial health plan.

Best answer: B

What this tests: Needs Analysis

Explanation: When assessing a client’s need for accident and sickness insurance, an advisor should recognize what EI sickness benefits can and cannot do. EI sickness benefits are intended to provide temporary income support when a client cannot work due to medical incapacity, and they are time-limited (commonly framed as up to 26 weeks).

This matters because many disabilities last longer than the EI sickness benefit period. If the client has limited employer sick leave or limited/no group LTD coverage, the advisor should identify the potential income gap after EI sickness benefits end.

EI sickness benefits are designed as short-term income support and are time-limited (currently up to 26 weeks), so they may leave a longer-term disability gap.

Question 3

Topic: Assess the Client’s Needs and Situation

Nadia, age 36, will have a planned surgery and may be hospitalized for several days. Her employer plan already reimburses eligible prescription drug costs and paramedical expenses. Nadia is more concerned about extra out-of-pocket costs during the hospital stay (parking, meals for family, babysitting) and wants a simple benefit that does not require submitting receipts. Her budget is limited.

Which Accident & Sickness solution is the most appropriate?

• A. A hospital cash (daily hospital indemnity) benefit that pays a fixed amount per day of hospitalization
• B. A long-term disability policy to replace employment income after an elimination period
• C. An extended health plan that reimburses prescription drugs and paramedical services up to stated limits
• D. A plan that reimburses the cost of a private hospital room when receipts are provided

Best answer: A

What this tests: Needs Analysis

Explanation: This question tests the distinction between indemnity benefits and reimbursement benefits in A&S products.

• Indemnity benefit: pays a fixed amount when a triggering event occurs (for example, a daily amount for each day the insured is hospitalized). It is often used to provide flexible cash for incidental costs that aren’t easily itemized as “eligible medical expenses.”
• Reimbursement benefit: pays back eligible expenses the client incurs (for example, prescription drugs), usually up to limits and typically requiring receipts or proof of expense.

Nadia specifically wants simple cash support for incidental expenses during a possible hospital stay and wants to avoid submitting receipts. That points to an indemnity-style hospital cash benefit, not reimbursement-based extended health coverage.

This matches her need for predictable cash for miscellaneous expenses and simplicity, because the benefit is a fixed amount triggered by hospitalization rather than receipts for specific items.

Question 4

Topic: Assess the Client’s Needs and Situation

When assessing how much individual (private) disability insurance a client needs, how do benefit offsets (e.g., CPP disability, workers’ compensation, employer group LTD/STD) generally affect the amount of private disability benefit that should be recommended?

• A. They allow the client to safely buy a higher private benefit because offsets guarantee that total disability income will exceed pre-disability earnings.
• B. They reduce the amount of private benefit that is likely to be payable, so the recommendation should focus on the client’s net income shortfall after considering other expected disability income sources and any integration/offset provisions.
• C. They only matter for tax purposes; the client can ignore them when deciding the private disability benefit amount.
• D. They do not affect the private benefit amount because private disability policies always pay in full regardless of other income replacement benefits.

Best answer: B

What this tests: Needs Analysis

Explanation: Benefit offsets (also called coordination or integration) are provisions that can reduce the disability benefit payable from one plan when the claimant receives disability income from other sources, such as employer group STD/LTD, CPP disability, or workers’ compensation.

From a needs-analysis perspective, the key point is suitability: the agent should aim to replace a reasonable portion of the client’s lost income, but avoid recommending private benefits that are unlikely to be payable because they will be reduced by other disability income. The practical approach is to estimate the client’s disability income need, identify other expected sources, and then recommend private coverage that fills the remaining gap (subject to what insurers will issue).

Offsets can reduce (or eliminate) what the private policy pays when other disability income is received. A suitable recommendation targets the remaining gap so total benefits don’t exceed what is likely payable.

Question 5

Topic: Assess the Client’s Needs and Situation

Nina, age 45, is considering an individual disability policy that would pay a fixed benefit of $3,000 per month if she becomes disabled. She is worried about a claim lasting 10 years.

Assume inflation averages 3% per year and that after 10 years, prices would be about 1.34 times today’s prices. Approximately what monthly benefit would be needed in year 10 to have the same purchasing power as $3,000 has today (ignoring taxes)?

• A. $5,340 per month
• B. $4,500 per month
• C. $4,020 per month
• D. $3,090 per month

Best answer: C

What this tests: Needs Analysis

Explanation: This question tests how inflation affects the purchasing power of a fixed disability (or long-term care) benefit during a long claim.

If benefits stay level while prices rise, the client’s real (inflation-adjusted) income replacement shrinks over time. Using the factor provided:

• Year-10 equivalent benefit = today’s benefit × inflation factor
• $3,000 × 1.34 = $4,020

A long-duration claim can therefore create a growing gap between the fixed monthly benefit and the client’s actual cost of living. That is why inflation protection options (often described as cost-of-living adjustment/indexing) may be relevant when assessing needs—especially for younger clients or anyone concerned about a claim lasting many years.

Using the provided inflation factor, $3,000 × 1.34 = $4,020. This illustrates how a long-duration claim can erode purchasing power and why inflation protection (COLA/indexing) can matter.

Question 6

Topic: Assess the Client’s Needs and Situation

Kiran (age 40) is self-employed and has a $480,000 mortgage. She says she is interested in critical illness insurance mainly to (1) pay off the mortgage if diagnosed with a covered condition, (2) pay for extra help at home, and (3) take time off work without worrying about cash flow.

Which advisor statement is INCORRECT when assessing Kiran’s need for critical illness coverage?

• A. “Let’s review your emergency fund and other assets, because that affects how much you could self-fund if you became critically ill.”
• B. “Let’s clarify how much lump sum you would want available for debt payoff and how long you’d want to take time away from work.”
• C. “Critical illness benefits can only be used to pay medical bills, so using the money for your mortgage or time off work wouldn’t be an appropriate goal.”
• D. “Let’s confirm any existing coverage, such as a spouse’s group benefits or any individual disability/critical illness coverage you already have.”

Best answer: C

What this tests: Needs Analysis

Explanation: This question tests client needs assessment for critical illness (CI) coverage based on the client’s intended use of a lump-sum benefit. In a needs analysis, the advisor should clarify what financial problems the client is trying to solve (debt obligations, time away from work, extra support costs) and how much liquidity would be helpful.

A key principle is that CI benefits are generally paid as a lump sum on diagnosis of a covered condition (subject to policy terms). The client typically decides how to use the money. Therefore, debt payoff and funding time away from work are valid client goals to explore when assessing need.

Good needs assessment also includes confirming existing resources (savings) and existing insurance/benefits, so the recommendation can be sized to the gap rather than based on assumptions.

This is incorrect. Critical illness insurance is typically a lump-sum benefit the client can use for any purpose (for example, debt, time off, caregiving, or out-of-pocket costs).

Question 7

Topic: Assess the Client’s Needs and Situation

Riley is on a group long-term disability (LTD) claim. The group benefits booklet says LTD is integrated with other disability income (including CPP disability and workers’ compensation) so that total disability income from all sources cannot exceed 70% of pre-disability earnings.

Riley tells the agent that CPP disability has just been approved and asks what will happen to the group LTD benefit. What is the most appropriate explanation?

• A. CPP disability will be reduced by the group LTD amount so Riley still receives the full LTD benefit from the insurer.
• B. The group LTD insurer must continue paying the same amount, because CPP disability is a government benefit and cannot affect an insurance payment.
• C. The group LTD insurer will usually reduce its monthly LTD payment by the CPP disability amount so the combined income stays within the plan’s maximum.
• D. The group LTD insurer will stop paying LTD entirely once CPP disability is approved, because there can only be one disability payor.

Best answer: C

What this tests: Needs Analysis

Explanation: This question tests the concept of offsets (integration) and why total income replacement is typically capped when multiple disability income sources could apply.

In many Canadian group LTD plans, the insurer’s benefit is designed to work alongside other disability income sources (for example, CPP disability or workers’ compensation). If the plan is integrated, the insurer does not simply “stack” benefits. Instead, the insurer’s payable amount is commonly reduced (offset) by the amount the claimant receives from other specified sources, so the claimant’s total disability income stays within the plan’s stated maximum (here, 70% of pre-disability earnings).

From an advising/process standpoint, the practical takeaway is that when a client has (or may receive) other disability income sources, the advisor should anticipate and explain potential reductions to the group insurer’s payment and make sure the client understands that “approval for another benefit” can change the net LTD amount paid by the insurer.

This matches an integrated/offset plan design: other disability income sources are used to reduce the insurer’s payable amount so total replacement does not exceed the stated cap.

Question 8

Topic: Assess the Client’s Needs and Situation

Sonia (age 38) is self-employed as a graphic designer. Her simplified monthly budget shows she needs about $4,000 to cover essential expenses if she becomes disabled. She says her income is “around $70,000” but varies month to month, and she wants to apply for an individual disability income policy with a $4,000 monthly benefit.

Which information should the agent obtain next because it is most likely to affect both the recommended benefit amount and the insurer’s underwriting decision on how much benefit Sonia can qualify for?

• A. A statement from Sonia’s family doctor confirming she is currently healthy
• B. A copy of Sonia’s mortgage statement showing the outstanding balance and interest rate
• C. A list of Sonia’s hobbies and travel plans for the next 12 months
• D. Recent proof of income, such as the last 2 years of personal tax returns (T1) and Notices of Assessment (or comparable business financial documentation)

Best answer: D

What this tests: Needs Analysis

Explanation: This question links a simplified cash-flow need estimate to a core underwriting reality: disability income benefits are limited by insurable earned income, not only by expenses.

Sonia’s budget suggests she needs about $4,000 per month, but because she is self-employed and her income fluctuates, the agent should confirm documented earned income before finalizing a benefit recommendation and proceeding with an application. In principle, insurers commonly rely on objective documentation (such as tax returns and Notices of Assessment, and/or business financial documentation) to verify income and determine the maximum benefit available.

Without income verification, the agent risks recommending a benefit amount that Sonia cannot qualify for, or that triggers underwriting changes (reduction of benefit, postponement, or other underwriting action).

For a self-employed client with fluctuating income, the insurer typically needs objective income evidence to set the maximum benefit, and the agent also needs it to confirm the budget-based benefit request is realistic and supportable.

Question 9

Topic: Assess the Client’s Needs and Situation

A client is estimating the disability income needed to maintain essential spending. Their essential monthly costs are:

• Mortgage: $2,100
• Car loan: $450
• Groceries: $900
• Utilities: $300
• Childcare: $600

They want coverage that could pay about $4,350 per month during a disability. Which disability insurance policy element corresponds to this amount? (All amounts are in CAD.)

• A. Definition of disability
• B. Benefit period
• C. Elimination period
• D. Monthly benefit amount

Best answer: D

What this tests: Needs Analysis

Explanation: This question tests the needs-analysis link between essential monthly spending (including debt payments) and the disability insurance policy element that replaces that income.

The client’s essential expenses total $4,350 per month. In disability insurance, the policy element that represents “how much will be paid each month if a claim is payable” is the monthly benefit amount. Other common policy elements (elimination period, benefit period, definition of disability) affect when benefits start, how long they can last, or when the contract considers the insured disabled—but they do not directly represent the monthly income-replacement figure.

This is the dollar amount payable each month once the definition of disability is met and the elimination period has been satisfied, so it’s the key element tied to replacing essential monthly expenses.

Question 10

Topic: Assess the Client’s Needs and Situation

Mason (age 34) is off work due to a serious illness. He wants to make sure his income would be protected for about a year if this happened again. He has been paying EI premiums and says, “EI sickness benefits should cover me.”

When assessing Mason’s needs, which single attribute is most important to compare to determine whether EI sickness benefits can meet his one-year income-protection goal?

• A. Waiting period before benefits start (EI sickness benefits start immediately with no waiting period)
• B. Maximum duration of benefits (EI sickness benefits are time-limited, up to 26 weeks)
• C. Definition of disability (EI sickness benefits pay as long as Mason cannot do his own job)
• D. Percentage of income replaced (EI sickness benefits replace all lost earnings)

Best answer: B

What this tests: Needs Analysis

Explanation: This question tests a needs-analysis comparison: matching the client’s required duration of income protection to the available benefit period.

EI sickness benefits provide temporary income support for medical incapacity and are time-limited (up to 26 weeks). If a client needs income protection for approximately a year, the maximum duration of EI sickness benefits is the deciding attribute that creates a likely gap.

Mason’s goal is about a year of income protection. EI sickness benefits provide temporary support and are capped in duration (up to 26 weeks), so duration is the deciding comparison factor.

Continue with full practice

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Related focused pages

• Free LLQP Accident & Sickness Full-Length Practice Exam
• LLQP Accident & Sickness: Product Analysis
• LLQP Accident & Sickness: Recommendation Implementation
• LLQP Accident & Sickness: In-Force Service

Free review resource

Read the LLQP Accident & Sickness Study Guide on SecuritiesMastery.com, then return to Securities Prep for timed practice.