- (Topic 3)
Cory is a recent college graduate who has just been hired by a marketing firm in an entry- level position. His employer group benefits only cover a short-term disability to a maximum of 119 days. He meets with an insurance agent to talk about disability coverage. To fully cover his salary, he would require a $3,000 monthly benefit. In reviewing options, he thinks that his ideal coverage of a 30-day waiting period and a ??to age 65?? benefit period comes at a cost that exceeds his budget. What recommendation should the insurance agent make to Cory regarding coverage?

Correct Answer:A
Comprehensive and Detailed Explanation:
Extending the waiting period (e.g., to 120 days) aligns with his 119-day STD coverage, reducing premiums while maintaining $3,000/month to age 65 (Chapter 7:Insurance Recommendation, Contract, and Service Needs).
Option A: Correct; cost-effective. Option B: Incorrect; weakens coverage. Option C: Incorrect; reduces protection. Option D: Incorrect; delays coverage.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 7:Insurance
Recommendation, Contract, and Service Needs.

- (Topic 3)
Bachir owns a successful video game business and has 10 employees. The time has come to plan business succession and the eventual sale of the business. Bachir??s nephew Kharim, who shows a real interest in the business, is identified as his successor. Bachir would like to protect his sales price until such time as the business is sold to Kharim, who does not have the funds yet and will need a few years to amass the required amount. Bachir and Kharim consult insurance agent Bianca for advice. What should Bianca propose?

Correct Answer:D
Comprehensive and Detailed Explanation:
Disability buyout insurance funds a buy-sell agreement if the owner (Bachir) becomes disabled, ensuring Kharim can purchase the business at the agreed price (Chapter 5:Insurance to Protect Businesses).
Option A: Incorrect; Kharim??s disability doesn??t affect Bachir??s sale. Option B: Incorrect; no loan is mentioned.
Option C: Incorrect; key person protects business operations, not succession. Option D: Correct; protects Bachir??s sale value if he??s disabled.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 5:Insurance to
Protect Businesses.

- (Topic 3)
Ziad, aged 34, was an elementary school teacher for several years. However, staffing cutbacks and his love of food have prompted him to go into business. He just purchased a pizza franchise (taking a $150,000 personal loan to finance the venture) and entered into a five-year lease for his business. Ziad owns a 20-year term life insurance policy with a face amount of $250,000. He is also covered for some benefits under his wife??s group insurance plan, but knows he needs additional coverage. What type of accident and sickness coverage should Ziad purchase first?

Correct Answer:C
Comprehensive and Detailed Explanation:
Creditor disability insurance ensures Ziad??s $150,000 loan payments if he??s disabled, protecting his primary financial obligation (Chapter 3:Insurance to Protect Assets). Option A: Secondary; lump-sum for illness.
Option B: Supplementary; not priority. Option C: Correct; loan protection first.
Option D: Important but secondary to loan.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 3:Insurance to Protect Assets.