LLQP Accident & Sickness: Product 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: Analyze the Available Products That Meet the Client’s Needs

In a small business group extended health and disability plan, which plan element most directly supports long-term premium sustainability by reducing anti-selection (i.e., preventing only higher-risk employees from enrolling)?

• A. Coordination of benefits rules to pay only the portion not covered by another plan
• B. Evidence of insurability for every employee, regardless of benefit level
• C. A minimum participation requirement for eligible employees
• D. Experience rating that automatically reduces premiums whenever claims increase

Best answer: C

What this tests: Product Analysis

Explanation: For small businesses considering group benefits to meet accident & sickness needs (extended health/dental and disability), the plan must be attractive for recruitment/retention and affordable for the employer and employees. A key sustainability issue is anti-selection: if enrollment is optional, employees who expect higher claims are more likely to join, which can drive up plan costs.

A standard plan design/underwriting control for sustainability is a minimum participation requirement (often paired in practice with some level of employer contribution). This encourages broad enrollment so risk and claims costs are spread across healthier and less healthy employees, helping stabilize premiums over time.

Other elements (like evidence of insurability, coordination of benefits, and experience-based premium adjustments) can be relevant to underwriting or claim payments, but they do not directly solve the core problem of uneven participation in a small group.

Requiring a high proportion of eligible employees to join spreads risk across the group and reduces the chance that only those expecting claims enroll, which supports stable, sustainable premiums.

Question 2

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

Sam and Priya will take their two children to Florida for 10 days. Priya’s group plan pays 50% of out-of-country emergency medical costs to a maximum of $2,000. Any individual travel policy pays after the group plan and applies its own deductible and coinsurance to the remaining eligible amount.

If a covered emergency costs $25,000, which travel option results in the lowest out-of-pocket cost for the family?

• A. Travel option with a $25,000 limit, $100 deductible, and 10% coinsurance
• B. Travel option with a $25,000 limit, $1,000 deductible, and 0% coinsurance
• C. Travel option with a $50,000 limit, $500 deductible, and 20% coinsurance
• D. Travel option with a $15,000 limit, $0 deductible, and 0% coinsurance

Best answer: B

What this tests: Product Analysis

Explanation: This is a coordination-of-benefits and cost-sharing comparison for out-of-country travel medical coverage. The goal is to protect the family’s assets by minimizing what they would have to pay themselves if a large emergency medical bill occurs.

Step 1: Apply the group plan.

• Group plan pays 50% of $25,000 = $12,500, but it is capped at $2,000.
• So the group plan pays $2,000.
• Remaining eligible expense = $25,000 − $2,000 = $23,000.

Step 2: Apply each travel option’s deductible, coinsurance, and limit to the $23,000 remainder.

• A policy with 0% coinsurance means the client only pays the deductible (as long as the remaining amount is within the policy limit).

The travel option with a $25,000 limit, $1,000 deductible, and 0% coinsurance produces the lowest out-of-pocket cost: $1,000.

After the group plan, $23,000 remains. With 0% coinsurance, the only out-of-pocket is the $1,000 deductible (the remaining $22,000 is within the $25,000 limit).

Question 3

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

Priya owns a small incorporated physiotherapy clinic and is reviewing two disability-related coverages. Based only on the exhibit, which interpretation is correct?

• A. Because Maple Physio Inc. is the insured under the BOE policy, Priya cannot receive any benefit from it even if the clinic’s expenses continue during her disability.
• B. Both policies mainly replace Priya’s personal take-home pay, but the BOE policy pays first because it has the shorter elimination period.
• C. The BOE policy pays Priya $12,000 per month to cover her mortgage and groceries because she is disabled, and the personal DI policy reimburses the clinic for expenses.
• D. The BOE policy is designed to help the clinic pay eligible operating expenses during Priya’s disability, while the personal DI policy pays Priya a monthly income benefit for her personal financial needs.

Best answer: D

What this tests: Product Analysis

Explanation: This question tests how to distinguish Business Overhead Expense (BOE) insurance from personal disability income (DI) insurance using a policy summary.

From the exhibit:

• The BOE policy insures the business (Maple Physio Inc.), pays a monthly benefit to the business, and is used to cover eligible overhead expenses that continue while the owner is disabled (for example, rent and utilities).
• The personal DI policy insures Priya, pays a monthly benefit to Priya, and is intended to help replace her personal income while she cannot work.

The key differentiators are who is insured, who receives the benefit, and what the benefit is meant to pay for.

The exhibit shows the BOE insured/payee is the corporation and the benefit pays eligible overhead expenses, while the personal DI insured/payee is Priya and the benefit is a monthly income benefit to her.

Question 4

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

Priya is considering individual critical illness (CI) insurance to protect her savings. She is most concerned that if she is diagnosed with a covered illness and her health declines quickly, she might not qualify for the lump-sum benefit before she dies. When comparing CI contracts, which design element is the single most important deciding factor for this concern?

• A. The survival period requirement (how long the insured must survive after diagnosis for the benefit to be payable)
• B. The contract’s exclusions and limitations (for example, exclusions for certain cancers or early-stage conditions)
• C. The contract’s definitions and diagnosis requirements for each covered condition
• D. The number of covered conditions included in the contract

Best answer: A

What this tests: Product Analysis

Explanation: This question tests a key CI contract design element: the survival period.

Most CI policies pay a lump-sum benefit only when:

• the insured is diagnosed with a covered condition that meets the contract’s definition/diagnosis requirements, and
• the insured survives for a specified period after diagnosis (the survival period).

Because Priya is worried about a rapid decline and dying soon after diagnosis, the single deciding comparison factor is whether the contract requires survival for a set number of days before paying the benefit, and how long that period is.

CI benefits are typically payable only if the insured survives a stated number of days after diagnosis. If Priya’s main worry is dying shortly after diagnosis, the survival period is the key contract element to compare.

Question 5

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

Mina (age 38) is considering an individual critical illness (CI) policy mainly because she wants to “get her premiums back” if she never claims. Her budget is tight and she is comparing policies that offer return of premium options and partial benefits for early-stage conditions.

Which statement by the insurance agent is INCORRECT?

• A. “If you want ‘premium back,’ choose the return of premium option and you’ll get all premiums refunded no matter what happens, even if you claim or cancel early.”
• B. “Return of premium features have conditions, so we need to confirm when a refund could be payable and whether a CI claim would affect eligibility for any refund.”
• C. “A partial benefit for certain early-stage conditions may pay only a portion of the CI amount, which can provide some funds earlier while the full CI amount remains for later covered conditions, depending on the policy.”
• D. “A return of premium option can increase the premium, so we should compare the extra cost to the value you place on a potential refund if you don’t make a CI claim.”

Best answer: A

What this tests: Product Analysis

Explanation: This question tests product-feature analysis for CI insurance (C2): how common CI policy options work and how to discuss suitability.

Clients who want “premium back” are usually referring to return of premium (ROP) features (for example, on expiry or on cancellation/surrender). These features typically increase the premium, and any refund is subject to specific policy conditions. It is not appropriate to guarantee that premiums will be refunded regardless of what happens.

Some CI policies also offer partial (early-stage) benefits, which may pay a portion of the CI amount for specified early-stage conditions. This can help provide funds earlier, but it does not mean the client automatically receives the full CI amount for an early-stage condition.

A suitable discussion focuses on:

• Cost vs value (ROP increases premiums)
• Confirming contract terms and conditions (when a refund might be payable)
• Avoiding promises of refunds or claim outcomes
• Explaining what partial benefits do (partial payout for specified conditions)

This is incorrect because it guarantees an outcome that depends on policy terms and conditions. Return of premium features are not “no matter what,” and a claim and/or early cancellation can affect whether any refund is payable.

Question 6

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

Mina has extended health and dental through her employer. It includes emergency out-of-country medical coverage, but only for the first 10 days per trip. Mina and her partner take a 21-day trip to the U.S. each winter and want to protect their savings from a large medical bill while travelling.

When comparing travel medical solutions, which single policy attribute should drive the recommendation most directly?

• A. The deductible or copay amount for emergency medical claims
• B. The maximum dollar limit for emergency medical coverage
• C. The per-trip maximum number of days covered (and whether the plan can top up beyond 10 days)
• D. Whether the plan includes trip cancellation and interruption coverage

Best answer: C

What this tests: Product Analysis

Explanation: This scenario tests travel medical coverage selection using a single deciding factor. Mina already has employer out-of-country emergency medical coverage, but it is limited to 10 days per trip. Because her trip is 21 days, the primary risk is that she will be uninsured for days 11–21, which could expose her personal savings to large emergency medical costs.

In product analysis for travel medical, the first “fit” test is often whether coverage applies when and where the client will be travelling. Here, that means confirming the maximum covered trip duration and whether the solution can extend/top up beyond the employer plan’s day limit for the entire 21-day trip.

The problem is a gap in coverage duration: her group plan stops after 10 days, but she travels for 21 days. The key comparison factor is whether the travel plan extends coverage to the full trip length.

Question 7

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

Which extended health insurance benefit category would most directly reimburse a plan member for prescription medication costs purchased at a pharmacy?

• A. Medical supplies
• B. Prescription drugs
• C. Paramedical services
• D. Vision care

Best answer: B

What this tests: Product Analysis

Explanation: Extended health insurance commonly groups coverage into benefit categories so plan members can understand what types of expenses are eligible. Prescription medications purchased at a pharmacy are a distinct category because they involve drug identification, dispensing, and plan rules (for example, what drugs are eligible).

Paramedical services, vision care, and medical supplies are separate categories intended for different types of health-related expenses.

Prescription medications are typically covered under the plan’s prescription drug benefit category, subject to any stated formulary, deductibles, or copay.

Question 8

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

Priya (age 34) wants individual disability insurance to protect her income. She says “I want the lowest premium possible,” but isn’t sure how long she could cover bills if she got sick. She has some employer benefits but doesn’t know the details. As the agent, what is the most appropriate next step to match the elimination period to her situation?

• A. Start the disability application now and plan to confirm elimination period and employer benefits after underwriting is complete.
• B. Recommend a long elimination period (for example, 120 days) immediately because longer elimination periods generally reduce the premium.
• C. Ask Priya to confirm her short-term resources (savings) and the details of any sick leave/STD/EI-type income replacement so you can choose an elimination period that bridges the gap and controls premium.
• D. Recommend the shortest elimination period available so benefits start as soon as possible, then discuss premium later.

Best answer: C

What this tests: Product Analysis

Explanation: This scenario tests how to analyze disability insurance options by selecting an elimination period that fits the client’s short-term resources.

The elimination (waiting) period is the time the insured must be disabled before the disability benefit becomes payable. In general, a longer elimination period lowers the premium, because the insurer is less likely to pay (or pays later). However, it must be coordinated with the client’s ability to cover expenses during the waiting period.

In practice, clients may “layer” their income protection:

• Immediate resources: emergency fund/savings
• Employer-paid sick leave
• Group short-term disability (STD) benefits
• Other temporary income replacement sources the client mentions (for example, government sickness benefits), if applicable

The right next step is to confirm the duration and amount of short-term income replacement and available savings, then choose an elimination period that the client can realistically sustain while still managing premium affordability.

The elimination period should align with how long the client can fund expenses or receive short-term income replacement. Longer elimination periods generally reduce premiums, but only if the client can cover the waiting time.

Question 9

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

Maya (age 35) is self-employed and wants individual disability insurance with predictable premiums and wording. You explain that contract type affects whether the insurer can change premiums or policy terms in the future.

Which statement about contract type is INCORRECT?

• A. A guaranteed renewable disability policy guarantees the premium will never increase for any reason.
• B. With a cancellable disability policy, the insurer may have broader ability to change premiums and/or coverage terms compared with non-cancellable or guaranteed renewable coverage.
• C. A guaranteed renewable disability policy generally means the insurer cannot cancel the policy or change its wording, but it may increase premiums for an entire class of similar policies.
• D. A non-cancellable disability policy generally means the insurer cannot change the premium or the contract wording (as long as premiums are paid).

Best answer: A

What this tests: Product Analysis

Explanation: This question tests how individual disability insurance (DI) contract type affects premium stability and the insurer’s ability to change policy terms.

In plain terms:

• Non-cancellable: provides the strongest stability. The insurer generally cannot change the premium or the contract wording as long as the policyholder pays premiums.
• Guaranteed renewable: provides strong stability of coverage/wording (the insurer generally must renew and cannot unilaterally change the policy wording), but premiums can typically be increased for a class of similar policyholders.
• Cancellable: provides less certainty. The insurer may have broader rights to change premiums and/or other terms (subject to the contract).

Because Maya’s priority is predictability, understanding which contract types lock premiums versus only guarantee renewability is essential to matching the product to her needs.

This confuses guaranteed renewable with non-cancellable. Guaranteed renewable typically does not lock the premium; it may still change on a class basis.

Question 10

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

In a group long-term disability (LTD) plan, the booklet states:

• Non-evidence maximum (NEM): $2,500 per month.
• Employees who apply within 31 days of becoming eligible can receive LTD coverage up to the NEM without evidence of insurability.
• Employees who apply later than 31 days (late entrants) must provide evidence of insurability for LTD coverage.

Jordan became eligible 6 months ago and is applying now for $2,500 per month of LTD coverage. What happens under this plan provision?

• A. Jordan is automatically covered for $2,500 per month because the amount requested is within the NEM.
• B. Jordan can enroll without evidence of insurability, but the elimination period will be extended as a late-entrant penalty.
• C. Jordan will be covered immediately, but only for a reduced amount below the NEM until evidence of insurability is provided.
• D. Jordan must provide evidence of insurability, and LTD coverage is subject to approval based on that evidence.

Best answer: D

What this tests: Product Analysis

Explanation: This question tests two common group plan concepts:

• A non-evidence maximum (NEM) is the maximum benefit amount an employee can receive without providing evidence of insurability (EOI), but only if they enroll when first eligible (often within a stated window).
• A late entrant (someone who applies after the eligibility/enrolment window) commonly loses the right to “no-evidence” coverage and must provide EOI, even for coverage that would otherwise be within the NEM.

Because the plan text explicitly says late entrants must provide EOI for LTD coverage, Jordan’s application for $2,500/month is subject to EOI and approval.

Because Jordan is a late entrant under the plan’s stated 31-day rule, evidence of insurability is required even though the requested amount is within the NEM.

Continue with full practice

Use the LLQP Accident & Sickness Practice Test page for the full Securities Prep route, mixed-topic practice, timed mock exams, explanations, and web/mobile app access.

Related focused pages

• Free LLQP Accident & Sickness Full-Length Practice Exam
• LLQP Accident & Sickness: Needs 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.