Free LLQP Exam Dumps

Question 76

- (Topic 3)
Denise, age 45, is a member of her employer??s group insurance plan, which provides disability protection for 60% of her annual salary of $60,000. Louis, her 42-year-old spouse, is self-employed, has an annual income of $45,000, and no disability protection. As parents of three teenagers, Denise and Louis need $6,000 a month to meet their financial obligations with respect to such expenses as housing, food, car, clothing, and entertainment. Which of the following best characterizes Denise and Louis?? current protection?

A. The likelihood of Denise and Louis becoming disabled at the same time is almost zer
B. So, there is no need for additional protection.
C. In the event Denise is disabled, she will receive $3,000/mont
D. Along with Louis?? monthly income of $3,750, the couple will have no difficulty meeting their financial obligations, so there is no need for additional protection.
E. Denise should increase her group insurance protection to cover 75% of her income.
F. In the event Louis is disabled and has no monthly income, Denise??s income will be insufficient to meet the couple??s financial obligation
G. It is recommended that Louis take out insurance to protect up to 60% of his income.

Correct Answer:D
Comprehensive and Detailed Explanation:
Denise??s annual salary is $60,000, and her group disability insurance covers 60% of this, equating to $36,000/year or $3,000/month ($60,000 ?? 0.60 ?? 12). Louis earns $45,000/year, which translates to $3,750/month ($45,000 ?? 12). Together, their current combined monthlyincome is $6,750 ($3,000 + $3,750). Their monthly expenses are $6,000, leaving a surplus of $750/month under normal circumstances.
Option A: This assumes simultaneous disability is the only risk, which is incorrect. The LLQP emphasizes assessing individual disability risks based on income replacement needs, not just joint probability (Chapter 2:Insurance to Protect Income).
Option B: If Denise is disabled, she receives $3,000/month from her group plan, and Louis earns $3,750/month, totaling $6,750/month. This meets the $6,000 need, but it assumes Louis remains able to work, ignoring his risk of disability.
Option C: Increasing Denise??s coverage to 75% ($3,750/month) is unnecessary since $6,750 already exceeds $6,000 when Louis works. This doesn??t address Louis?? lack of protection.
Option D: If Louis is disabled, he earns $0, and Denise??s $3,000/month (her full salary, assuming no disability) falls short of $6,000 by $3,000. Louis needs coverage for 60% of his income ($45,000 ?? 0.60 = $27,000/year or $2,250/month), which, combined with Denise??s $3,000, totals $5,250—close to their needs, with adjustments possible. This aligns with the LLQP??s focus on ensuring both income earners are protected (Chapter 6:Client Profile).
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 2:Insurance to Protect Income, Chapter 6:Client Profile.