Free LLQP Accident & Sickness Practice Questions: Product Analysis

Use this focused LLQP Accident & Sickness page as a short practice test for Product Analysis. The items are original Finance Prep sample exam questions built for LLQP-style scenario judgment, not trivia, puzzle questions, official LLQP questions, copied live-exam content, or exam dumps.

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Sample questions

These are original Finance Prep practice questions aligned to this LLQP competency area. They are not official LLQP questions, copied live-exam content, or exam dumps. Use them to preview question style and explanation depth before continuing with topic drills, mixed sets, and timed mock exams in Finance Prep.

Question 1

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

Meera is off work due to illness and expects to be disabled for 10 months. Her employer provides 2 weeks of paid sick leave. She has no employer short-term disability (STD). She can receive EI sickness benefits after a 1-week waiting period, for a maximum of 26 weeks. Her group long-term disability (LTD) has a 35-week elimination period (LTD begins after 35 weeks of continuous disability).

Assuming she qualifies for EI and remains continuously disabled, how many weeks will Meera have no income replacement between the end of sick leave and the start of LTD?

• A. 7 weeks
• B. 6 weeks
• C. 8 weeks
• D. 5 weeks

Best answer: A

What this tests: Product Analysis

Explanation: This question tests sequencing and timing of common income-replacement “layers.” Typically, employer paid sick leave (if available) pays first, EI sickness may apply next if the person qualifies and has no other wage-loss plan paying, and LTD begins only after its elimination period is satisfied.

To find the uncovered weeks before LTD starts, compare the LTD elimination period to the weeks that actually provide payment before LTD:

• LTD starts after 35 weeks of continuous disability.
• Paid sick leave provides 2 paid weeks.
• EI sickness can pay a maximum of 26 weeks (and the 1-week waiting period is an unpaid week).

Weeks without income replacement before LTD begins:

• Total weeks before LTD: 35
• Weeks with payment before LTD: 2 (sick leave) + 26 (EI payable weeks) = 28
• Uncovered weeks: 35 − 28 = 7 weeks

Those 7 weeks include the EI waiting week and the weeks after EI reaches its maximum but before LTD begins.

There are 35 weeks before LTD starts. Sick leave covers 2 weeks and EI can pay 26 weeks, leaving 35 − (2 + 26) = 7 weeks not covered (including the EI waiting week).

Question 2

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

Mina, age 38, is applying for an individual disability income policy for $4,000/month with a 90-day elimination period. She is a dental hygienist and reports shoulder tendinitis diagnosed 2 months ago. She is still working, but only 3 half-days per week and is in physiotherapy. She has no prior disability claims, does recreational cycling, and took a one-week trip to Mexico last month.

Which detail is most likely to prompt additional medical evidence and potentially affect underwriting (for example, a rating, exclusion, or decline)?

• A. The benefit has a 90-day elimination period
• B. She is currently working reduced hours due to a recent shoulder condition and ongoing treatment
• C. She traveled to Mexico last month
• D. She does recreational cycling

Best answer: B

What this tests: Product Analysis

Explanation: This question tests how underwriting focuses on current and ongoing risk when someone applies for disability income (DI) insurance.

A client who is still working but has reduced hours or reduced capacity due to a recent injury/illness is showing a functional limitation right now. From an underwriting perspective, that increases the chance of an early claim and often leads to additional medical follow-up (for example, detailed health questions and potentially an attending physician statement).

The scenario also connects to DI disability concepts:

• Total disability: the insured cannot perform the substantial duties of their occupation (as defined in the contract).
• Partial disability: the insured can still work but only in a limited way (for example, fewer hours or fewer duties).
• Residual disability: a common policy feature that typically pays a partial benefit when the insured has a loss of income because of disability, even though they can work in some capacity.

Mina’s reduced work schedule due to tendinitis is consistent with a partial/residual-type situation (working, but limited), which is precisely the kind of current impairment underwriters will scrutinize.

A current condition that is already limiting work capacity is a key underwriting concern because it suggests an ongoing impairment and higher near-term claim risk. This commonly triggers follow-up medical evidence (for example, more health details and possibly an APS).

Question 3

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 non-cancellable disability policy generally means the insurer cannot change the premium or the contract wording (as long as premiums are paid).
• B. A guaranteed renewable disability policy guarantees the premium will never increase for any reason.
• C. 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.
• D. 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.

Best answer: B

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 4

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

An employer has a group LTD plan. The plan has a master policy and each employee receives a certificate. The certificate shows a 90-day waiting period and notes a pre-existing condition limitation that can apply to a late entrant. Lina declined LTD when first eligible, enrolled a year later, and becomes disabled two months after enrolling due to a condition she was treated for before enrolling.

What is the most likely coverage outcome under typical group LTD provisions?

• A. LTD benefits must be paid because Lina enrolled and the certificate is the contract.
• B. LTD benefits may be limited or not payable due to the pre-existing condition limitation, especially because Lina is a late entrant.
• C. The employer must reimburse Lina because participation requirements were not met when she first declined coverage.
• D. The 90-day waiting period is waived for late entrants, so benefits should start immediately.

Best answer: B

What this tests: Product Analysis

Explanation: This question tests common group disability plan provisions and what they can mean at claim time.

In group LTD, the master policy is the legal contract between the insurer and the plan sponsor (typically the employer). Employees usually receive a certificate, which summarizes key coverage terms and does not replace the master policy.

Two common provisions that affect “what happens if…” outcomes are:

• Waiting period (elimination period): benefits generally start only after the waiting period is satisfied and the insured remains disabled.
• Typical limitations: group LTD often includes pre-existing condition limitations, and these can be especially relevant for a late entrant (someone who did not join when first eligible and enrolls later). A claim that relates to a condition that existed or was treated before coverage began may be limited or excluded, depending on the plan’s wording.

Here, Lina is both a late entrant and her disability is tied to a prior treated condition, so the pre-existing condition limitation is the key risk to benefits being payable at all.

Late entrants are commonly subject to stricter rules, and a pre-existing condition limitation may restrict claims arising from conditions that existed or were treated before coverage took effect.

Question 5

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

A small tech company renews its group extended health plan and amends the contract effective July 1. The amendment reduces the annual paramedical limit and changes the drug reimbursement percentage. Several employees have ongoing treatment and want to know whether expenses incurred around July 1 will be covered under the old or new terms. As the advisor, what is the BEST way to communicate this change to reduce misunderstanding and complaints?

• A. Post the full amended contract on the company intranet on July 1 without a summary, since the legal wording is the most accurate description of the change.
• B. Wait until the first denied or reduced claim occurs, then explain the amendment to the affected employee so you do not alarm the rest of the group.
• C. Send a written member notice before July 1 that clearly summarizes what is changing, the effective date, and how claims will be handled based on the date of service, with a link to the updated benefit booklet and a contact for questions.
• D. Tell the plan administrator (HR) about the amendment and instruct them to answer employee questions using the insurer’s administration guide.

Best answer: C

What this tests: Product Analysis

Explanation: When a group plan is amended at renewal (or mid‑term), members are most likely to complain when they do not understand (1) what changed, (2) when it changed, and (3) how the change affects claims—especially for ongoing treatment.

A best‑practice communication focuses on plain language and practical impact:

• Identify the specific benefits changing (for example, limits and reimbursement).
• State the effective date prominently.
• Explain claims impact in an operational way (commonly, the date of service determines which plan terms apply), so members can plan.
• Point members to the updated benefit booklet/summary and a clear contact path for questions.

This reduces surprises at claim time and helps employees understand what to expect before they incur expenses.

This approach is clear and proactive: it highlights the key changes, the effective date, and the practical impact on claims, while directing members to full details and support.

Question 6

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

Rina is leaving her employer in two months to become a self‑employed consultant. She wants extended health and dental coverage she can keep even if she changes contracts or stops working for a particular company. Which attribute is the main deciding factor that points to an individual health plan instead of relying on a group plan?

• A. Portability: an individual plan is owned by Rina and can generally continue regardless of employer changes.
• B. Plan design flexibility: group plans typically allow each employee to customize benefits more than an individual plan.
• C. Simplified underwriting: group plans usually have fewer medical questions than individual plans.
• D. Employer administration: group plans are set up and administered by the employer for employees.

Best answer: A

What this tests: Product Analysis

Explanation: This question tests the key comparison attribute of portability between group and individual health plans.

Group health plans are connected to employment: eligibility and continuation typically depend on being part of the employer’s plan. When employment ends, group coverage often ends (unless a separate conversion/continuation option exists, which is not stated here). By contrast, an individual health plan is personally owned and is generally designed to continue even if the client changes jobs, becomes self‑employed, or moves between contracts—subject to keeping premiums paid and meeting contract terms.

Because Rina’s main goal is to keep coverage regardless of employer changes, portability is the deciding factor that points to an individual plan.

Her key requirement is coverage that is not tied to employment. Individual plans are typically personally owned and can continue when jobs/contracts change.

Question 7

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

Jaya owns a new marketing agency with 14 employees. She wants to add group extended health and disability coverage, but the business has limited cash reserves and she wants predictable monthly costs. The agency has no prior group claims history and Jaya does not want the company to pay employees’ health claims directly.

Which group plan underwriting/funding approach is the most appropriate recommendation?

• A. An administrative services only (ASO) arrangement, where the insurer administers the plan but the employer pays the actual claims
• B. A plan design that maximizes claim refunds to the employer when claims are low, with the employer taking on most claim fluctuations
• C. A fully insured plan using experience rating, where premiums are primarily based on the agency’s own past claims results
• D. A fully insured plan priced using manual rates, where the insurer sets premiums based on group characteristics and assumes the claim risk

Best answer: D

What this tests: Product Analysis

Explanation: This question tests how group plan pricing/funding approaches differ in who bears the financial risk of claims and how much the employer’s own claims experience affects future costs.

• Manual rating (fully insured): The insurer sets premiums using rating factors (for example, group size, industry, location, demographics). The insurer bears the claim risk, and premiums are typically more predictable for the employer—especially for small groups where individual group experience is not very credible.

• Experience rating (fully insured): Premiums are influenced more directly by the group’s own historical claims. This can reward good experience but can also increase volatility and is more meaningful when there is sufficient, credible claims data.

• ASO (Administrative Services Only): The insurer (or TPA) administers the plan, but the employer funds claims as they occur (plus an admin fee). The employer bears most of the claim cost risk, so monthly costs can fluctuate significantly.

In the scenario, the employer is small, has no prior claims history, wants predictable monthly costs, and does not want to pay claims directly—pointing to a fully insured, manually rated arrangement.

This best matches the need for predictable premiums and low employer risk, especially when the group is small and has limited credible claims experience.

Question 8

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

Lina is comparing extended health plans. One plan has a $300 annual deductible and then pays 80% of eligible physiotherapy expenses (Lina pays 20% coinsurance). Lina expects $1,000 of eligible physiotherapy this year and there are no other limits stated.

Which statement is INCORRECT?

• A. Lina must pay the first $300 of eligible expenses herself before the 80% reimbursement applies.
• B. Lina’s total out-of-pocket for the year would be $440 for this $1,000 physiotherapy expense.
• C. Once Lina has paid the $300 deductible, the plan covers 100% of her physiotherapy costs for the rest of the year.
• D. After the deductible, Lina pays 20% of the remaining $700 of expenses.

Best answer: C

What this tests: Product Analysis

Explanation: This question tests how deductibles and coinsurance affect a client’s out-of-pocket costs in an extended health plan.

• A deductible is the amount the client pays first before the plan starts paying.
• Coinsurance is the percentage split after the deductible (here, the plan pays 80% and the client pays 20%).

With $1,000 of eligible expenses:

• Lina pays the first $300 (deductible).
• Remaining eligible amount is $700.
• Lina pays 20% of $700 = $140.
• Total out-of-pocket is $300 + $140 = $440.

Therefore, it is incorrect to say the client pays nothing after the deductible under an 80% plan, unless additional plan features (like a stated out-of-pocket maximum or 100% coverage after deductible) are explicitly provided.

This is incorrect because an 80% plan still leaves the client paying 20% coinsurance even after the deductible is met (unless an out-of-pocket maximum or 100% coverage is stated).

Question 9

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

Best answer: A

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 10

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

Taylor and Jordan are married and each has an employer extended health plan. Both plans reimburse eligible prescription drugs at 80%, with no deductible. Their insurers follow this coordination-of-benefits rule: the claimant’s own plan pays first, and the spouse’s plan pays second (total reimbursement cannot exceed the actual expense). Taylor submits a $600 prescription claim. How should the claim be coordinated?

• A. Jordan’s plan pays first because Jordan is the higher-income spouse, and Taylor’s plan pays second.
• B. Both plans each pay 80% of the $600 claim, and Taylor keeps the difference as extra reimbursement.
• C. Taylor’s plan pays first for Taylor, and Jordan’s plan may cover the remaining eligible balance up to the amount not already reimbursed.
• D. The two plans must split the claim 50/50 because both cover prescriptions at the same percentage.

Best answer: C

What this tests: Product Analysis

Explanation: The deciding attribute is primary vs secondary payer order under coordination of benefits (COB). When a family has more than one health/dental plan, claims are typically paid in sequence:

• The primary plan pays first according to its terms.
• The secondary plan then considers the remaining eligible amount, but total payments cannot exceed the actual expense.

Here, the rule is provided: the claimant’s own plan is primary and the spouse’s plan is secondary. Since Taylor is the claimant, Taylor’s employer plan pays first (80% of $600 = $480). The spouse’s plan can then reimburse up to the remaining eligible balance (up to $120), without creating any overpayment.

This matches the stated coordination-of-benefits rule and the principle that combined payments cannot exceed the $600 expense.

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Related focused pages

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

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