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LLQP Life License Qualification Program (LLQP) Questions and Answers

Questions 4

Germain is a life insurance agent. This morning, he receives a call from Jason, whose wife, Rosalie owned a $50,000 life insurance policy that she purchased from Germain seven years ago. Jason explains that Rosalie had a heart attack and died last week. Germain promises to help as much as he can.

Options:

A.

He can provide the claim form to Jason and help him fill it out.

B.

He can assure Jason that the payment will be made within 5 days after receipt of the claim.

C.

He can inform Jason that the death benefit will be paid within 30 days of Rosalie’s death.

D.

He can assure Jason that he will settle the death benefit as quickly as possible.

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Questions 5

The company Xtra is growing. Mr. Trenet, chair of the executive committee, invites his financial security advisor, Noah, to meet with them to underwrite an annuity contract. The treasurer of Xtra offers to invest $2,500,000 of the company’s retained earnings. Before voting on a resolution to designate a policyholder, the treasurer asks Noah if Xtra can be designated as the policyholder instead of Mr. Trenet. What answer should Noah give?

Options:

A.

Only an individual can be a policyholder; therefore, Noah can recommend that Mr. Trenet be the policyholder

B.

For Xtra to become the subscriber of the contract, the investment amount must come from aregistered plan, such as a retirement fund

C.

Because Xtra is a legal person, Xtra can be the policyholder; Mr. Trenet must be the subrogated annuitant to approve decisions on behalf of Xtra

D.

If the capital is not registered, Xtra can be the policyholder

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Questions 6

On February 5, Ayla started working at Larson Group Inc. as an administrative assistant. Larson Group offers all employees a group health, dental and life insurance plan that commences after a 3-month waiting period. On April 7, Ayla felt ill and drove herself to the hospital. The doctor diagnosed two clogged arteries and performed an emergency surgery. Ayla was unable to work for 2 months, then died of complications on June 9. Will the group insurance plan pay the death benefit?

Options:

A.

Yes, because she died of natural causes.

B.

Yes, because her group life coverage started on May 5.

C.

No, because Ayla was not actively at work when the coverage started.

D.

No, because Ayla did not provide the insurer with any proof of insurability.

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Questions 7

Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael what she should do.

Options:

A.

Renew her current policy at the same rate.

B.

Renew the policy at an increased rate.

C.

Renew her policy and restart the incontestability period.

D.

Shop around for a better rate.

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Questions 8

Maxine meets with Toshiko, an insurance agent for United Life, to purchase a $10 million universal life insurance policy. Once United Life reviews Maxine's file, they agree to insure her for $3 million. United Life then contacts Extra Life Company, who agrees to insure Maxine forthe additional $7 million. Toshiko asks his supervisor Bob how the death benefit will be paid to Maxine's beneficiary when she dies.

Options:

A.

United Life and Extra Life will each directly pay the beneficiary.

B.

Extra Life will issue a cheque for $10 million.

C.

United will issue a cheque for $10 million.

D.

The full death benefit will be paid by Assuris.

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Questions 9

Francis owns a $250,000 insurance policy with an accidental death and dismemberment (AD&D) rider. Francis calls his insurance agent Andrew to inform him that he permanently lost the use of his right hand. He explains to Andrew that his brother shot him when he broke into his brother’s house to recover a gold watch that was rightfully his. Francis wants to know how much he will receive from his AD&D rider.

Options:

A.

Francis will receive a benefit of $165,000.

B.

Francis will receive a benefit of $187,500.

C.

Francis will receive a benefit of $250,000.

D.

Francis will not receive any benefit.

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Questions 10

Alexandre has just become a father. He wishes to take out a life insurance policy from Antoine, an insurance of persons representative. During their meeting, Alexandre mentions his love of mountain climbing. What should Antoine do?

Options:

A.

Warn Alexandre that no insurer covers activities such as mountain climbing, which are considered legal exclusions under the Civil Code of Quebec

B.

Check and explain the policy’s exclusion clauses, because the insurer could turn down the claim if Alexandre dies while mountain climbing

C.

Specify that the Charter of Human Rights and Freedoms only allows exclusions based on age, gender, or civil status in insurance contracts

D.

Explain only the insurance policy’s general coverage clauses

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Questions 11

Paulette earns a modest income working as a delivery driver for FastFlowers Inc. in Quebec. The florist company has over 80 employees, 20 of whom are delivery drivers. The employees benefit from a group short- and long-term disability plan. One morning, while delivering flowers, Paulette's truck is struck by a bus. Paulette is taken to the hospital where a doctor deems that she will be unable to work for at least 4 months. Paulette contacts Jade, the human resources manager, to ask her who will pay her disability benefits.

Which of the following answers is CORRECT?

Options:

A.

Employment insurance (EI).

B.

Her group insurance.

C.

Société de l'assurance automobile du Québec (SAAQ).

D.

Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST).

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Questions 12

Insurance of persons advisor Somalia is careful to comply with the standards and regulations when she meets with potential clients. Under no circumstances would she want them to feel aggrieved or not respected. She makes sure to know their rights. Which legislation does Somalia not have to worry about?

Options:

A.

An Act respecting the distribution of financial products and services (Distribution Act)

B.

An Act respecting the protection of personal information in the private sector (APPIPS)

C.

The Quebec Charter of Human Rights and Freedoms

D.

The Insurers Act and the Regulation under the Act respecting insurance

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Questions 13

Insurance of persons representative Véronique is meeting clients referred by an acquaintance for the first time. Observing some suspicious behaviours on their part, Véronique is thinking about reporting the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Which behaviours are signs of suspicious transactions?

Options:

A.

The clients ask a lot of questions about internal controls and the amounts involved seem very high given their apparent financial situation

B.

The clients are in a hurry, the planned transaction is fairly simple, and they want to pay the amount due in cash

C.

The clients are in a hurry, do not seem interested in knowing the long-term benefits of the transaction, and want to pay the amount due in cash

D.

The clients seem interested in knowing the long-term benefits of the transaction, which is simple, and the amounts involved seem very high given their apparent financial situation

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Questions 14

Coraline is a landscape gardener who owns a disability insurance (DI) policy. The policy will pay her a $3,000 monthly benefit after a 90-day waiting period. She is diagnosed with cancer, and because she has to undergo months of chemotherapy, she will be unable to work. She calls Robin, her insurance agent, to inform him of her diagnosis. She would like to know more information about the claims process.

Which of the following statements is CORRECT?

Options:

A.

Coraline must contact her agent by phone within 30 days of learning about her diagnosis.

B.

Coraline has 30 days to provide the insurer with all of the information required to process the claim.

C.

The insurer must pay Coraline the benefit amount within 30 days after receipt of the proof of loss.

D.

The payment of the initial benefit to Coraline must occur within 30 days after the end of the waiting period.

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Questions 15

Kirill purchases a $250,000 permanent life insurance policy on the life of his grandson, Dmitry. Kirill asks his wife Katya to pay the policy premiums and names his daughter, Natalya, as the subrogated policyholder. He does not name a beneficiary. Subsequently, Kirill dies without a will.

Who will become the new policyholder?

Options:

A.

The executor of Kirill's estate.

B.

Katya.

C.

Natalya.

D.

Dmitry.

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Questions 16

Nathalie worked for 25 years as an administrative assistant at a manufacturing company. When she left the company 10 years ago, she transferred the money that she accumulated from the company’s pension plan into a locked-in retirement account (LIRA). Now she is 60 years of age and would like to withdraw the money from the LIRA.

Under which of the following circumstances would Nathalie be allowed to withdraw her funds?

Options:

A.

She moved to Arizona last year.

B.

She is disabled and her life expectancy is reduced.

C.

She is retiring.

D.

She will start collecting QPP benefits.

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Questions 17

Pierre is an insurance of persons representative. His new client, Carole, wishes to buy life insurance but wants to know everything about life insurance products before making a choice. What are Pierre’s responsibilities in this case?

Options:

A.

Pierre must describe the products he offers to Carole and explain the coverage offered. He must clearly indicate and explain the coverage exclusions

B.

Pierre can simply give Carole the insurer’s explanatory brochures providing details on the products. He must avoid giving explanations so as not to influence Carole

C.

Pierre must have a conference call with the insurer and Carole so that she can ask the insurer any questions she may have

D.

Pierre must ask Carole to put all her questions in writing and send them to the insurer

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Questions 18

Insurance of persons representative Flavie meets with Julius to analyze his needs. At the end of the meeting, Flavie makes another appointment to present the results of the analysis and the proposed strategies. She hands Julius her business card, which says: “One of the company’s 10 best salespersons at your service!” Flavie even adds that she is the office’s top salesperson and earns more than $250,000 a year in commissions and bonuses. What changes should Flavie make for her representation practices to comply with the obligations of an insurance of persons representative?

Options:

A.

Give her business card at the beginning of the meeting

B.

Remove the slogan from her business card

C.

Give her business card only at the second meeting

D.

Avoid disclosing the fact that she is paid by commission

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Questions 19

Concilius has had a whole life (permanent) insurance policy for the past eight years. He decides he no longer wants this policy and stops paying the premiums. The cash value keeps the policy in effect for 28 months, after which it lapses. However, 46 months later, Concilius regrets his decision and applies to reinstate his policy. He is prepared to prove that he still meets the insurability conditions and to pay the overdue premiums plus interest, the cash value used, and the interest. Under what conditions will Concilius’ policy be reinstated?

Options:

A.

With the addition of a new premium based on his current age

B.

With the same initial conditions

C.

With an increase in the price of the premium

D.

With a reduction in the insured amount

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Questions 20

Alexandre, a financial security advisor, recently left FinCode Inc. because of an unresolved dispute with the company. He is continuing his career as an independent advisor. This week, he has an appointment with a client who tells him that he met with another FinCode Inc. employee. However, that employee has a disciplinary record at the CSF for fraudulently copying a signature on a form. Since the client does not work in insurance and the information is public knowledge, Alexandre provides him with some clarification regarding the other advisor’s case. How can Alexandre encourage the client to do business with him without denigrating his competitor?

Options:

A.

By telling the client to always check an advisor’s record with the CSF

B.

By informing the client of his recent departure from FinCode Inc. owing to an unresolved dispute

C.

By emphasizing his unique approach that sets him apart from his competitors

D.

By talking about his experience with the other advisor when they worked for the same firm

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Questions 21

Last year, Ezekiel purchased a $100,000 life insurance policy and named his wife Jolene as an irrevocable beneficiary of the policy. Last week, Ezekiel returned home early from a business trip and decided to surprise his wife instead of calling ahead. He arrived at midnight and not wanting to wake her, entered the house from the back door and left the lights off. Not expecting the intruder to be her husband, Jolene stabbed him in the heart with a kitchen knife. She quickly realized her mistake and called 911. Unfortunately, Ezekiel died in the hospital from his wounds. The police deemed Ezekiel's death as accidental, and no charges were filed. Will the insurer pay the death benefit?

Options:

A.

Yes, because Ezekiel’s death was accidental, Jolene did not intend to kill him.

B.

Yes, because Jolene is the designated irrevocable beneficiary.

C.

No, because he died within the first 2 years of purchasing the policy.

D.

No, because Jolene caused his death.

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Questions 22

Ming-Na is a McGill University graduate interested in pursuing a career as an insurance of persons representative. She wants to know which piece of legislation sets out the definition and role of insurance of persons representatives.

Which of the options below is CORRECT?

Options:

A.

The Insurers Act.

B.

The Distribution Act.

C.

The Act respecting insurance.

D.

The Act respecting prescription drug insurance.

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Questions 23

Zaid married Baheya five years ago in Montreal. A year later, Zaid purchased two individual term-life insurance policies, one on his life and the second on Baheya’s life, each with a death benefit of $250,000. The marriage didn't last long, and the couple divorced shortly thereafter. Baheya went on to marry Omar, and the new couple had a baby together, named Darwish.

Last week, Baheya died in a car accident. While settling her estate, Omar discovered that no beneficiary was designated on Baheya’s life insurance policy.

To whom will Baheya’s death benefit be paid?

Options:

A.

Zaid

B.

Omar

C.

Darwish

D.

Baheya’s succession

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Questions 24

Vasu, an insurance agent, meets with Francine, his new client. Francine wants to purchase a disability insurance policy. Vasu helps her complete the application form. In the process, he collects all the required medical and lifestyle information on his client and wonders what he must do with the information he collected.

Which of the following options is CORRECT?

Options:

A.

Vasu must send a copy of the medical and lifestyle-related information to the insurer, his supervisor, and his client, and must keep a copy in his file.

B.

Vasu must send a copy of the medical and lifestyle-related information to the insurer, his supervisor, and keep a copy in his file.

C.

Vasu must send a copy of the medical and lifestyle-related information to the insurer and keep a copy in his file.

D.

Vasu must send a copy of the medical and lifestyle-related information to the insurer only, and he cannot keep a copy in his file.

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Questions 25

Josh is meeting with William, his financial advisor, to notify him of the death of his spouse, Linda, for whom he is the beneficiary. Josh is asking William what requirements are necessary for proof of claim on their life insurance policy. Which of the following documents/information are required by Josh to ensure that a proper claim is approved by the insurance company?

Options:

A.

(iv) only: Death Certificate.

B.

(i) and (ii): Proof of Age and Place of Death.

C.

(i), (iii), and (v): Proof of Age, Claim Form, and Coroner’s Report.

D.

(i), (iii), and (iv): Proof of Age, Claim Form, and Death Certificate.

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Questions 26

Omar and Martha are common-law spouses employed by a company that has a group life and disability insurance plan. Omar has named Martha his beneficiary while Martha has named Omar as her beneficiary. Omar and Martha got drunk one Saturday night, stole a car, and decided to rob a convenience store. As they drove away from the store, Omar hit a light post. He becamepermanently disabled while Martha died at the scene. What will happen when Omar submits claim forms for disability and death benefits?

Options:

A.

The insurer will pay the death benefit to Omar but will not pay him a disability benefit.

B.

The insurer will not pay the death benefit to Omar and will not pay him a disability benefit.

C.

The insurer will pay the death benefit to Omar and will pay him a disability benefit.

D.

The insurer will not pay the death benefit to Omar but will pay him a disability benefit.

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Questions 27

Mercedes is a single mother to her 5-year-old son Arthur. Arthur's father Richard is not in his son's life because he is a recovering drug dealer who spent the last 4 years in and out of prison. Mercedes has full custody of Arthur and cannot count on help from her family because they live in another province.

Wanting to ensure his well-being, in the event of her death, Mercedes purchases a $100,000 life insurance policy and names Arthur the sole beneficiary of the policy.

If she died without a will who would receive the death benefit?

Options:

A.

Arthur

B.

Richard

C.

Director of youth protection

D.

Mercedes's estate

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Questions 28

Ariana is a Vancouver restauranteur who owns a $250,000 universal life (UL) insurance policy with a cash surrender value that has grown considerably over the years. Unfortunately, her restaurant has fallen on hard times and in an effort to turn the business around, she takes out a string of business loans that she personally guaranteed. To protect her life insurance from creditors, she changes the beneficiary designation from her estate, naming her husband as a revocable beneficiary. Despite her efforts, the restaurant’s profits do not improve, and she is forced to close her business and file for bankruptcy. Can her creditors seize her cash surrender value?

Options:

A.

Yes, because she changed her beneficiary designation to hinder creditors.

B.

Yes, because she has money accumulated in her cash surrender value.

C.

No, because her husband is a protected class beneficiary.

D.

No, because the creditors can only go after the restaurant's assets.

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Questions 29

Everett is an insurance of persons representative who works exclusively for Moon Life Insurance. He wants to leave the company and become an independent representative. He knows that before he branches out on his own, he needs to ensure he has sufficient liability insurance.

Which of the following statements about his professional liability insurance is CORRECT?

Options:

A.

His liability insurance must have coverage of not less than $1,500,000 per claim.

B.

If a contract has a deductible, it may not exceed $20,000.

C.

This insurance covers gross faults committed by an insurance representative.

D.

Professional liability insurance covers fraud or misappropriation.

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Questions 30

Candace, an insurance agent, met with her client Rebecca on March 15th to complete a life insurance application form. Rebecca applied for a T-10 $200,000 life insurance policy, she told Candace that she will wait for her policy to be accepted before making a premium payment. On April 10th, the application was accepted by the insurance company and Candace promptly called Rebecca to give her the good news. Candace delivered the policy to Rebecca on April 15th during the meeting, Rebecca gave Candace a cheque to cover her first premium and a void cheque to cover subsequent premium payments. Candace submitted the cheques to her manager on April 21st. When did Rebecca’s policy come into force?

Options:

A.

March 15th

B.

April 10th

C.

April 15th

D.

April 21st

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Questions 31

Josh is a successful insurance agent with Smart Insurance Inc. who mentors new agents and gives them tips on how to increase their client base. He tells Clarence, a new agent, that he should send an email to close friends and family members to explain the services that he now offers. Clarence is worried about sending unsolicited promotional emails because Firash, the compliance manager, had told him that the practice is not allowed. What legislation was Firash correctly referencing?

Options:

A.

The Personal Information Protection and Electronic Documents Act (PIPEDA).

B.

The Privacy Act.

C.

Canada’s Anti-Spam Legislation (CASL).

D.

The Criminal Code.

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Questions 32

Kaamil meets with Omar, his insurance agent, to purchase a whole life insurance policy. Kaamil wants to name his wife Ofra as the irrevocable beneficiary of the policy. Before proceeding, which of the following considerations should Omar CORRECTLY ask his client to reflect on?

Options:

A.

Ofra will be able to make a cash withdrawal without Kaamil's consent.

B.

Ofra will be able to withdraw funds from Kaamil's cash surrender value.

C.

Kaamil can surrender the policy without obtaining Ofra's consent.

D.

Kaamil will need to obtain Ofra’s consent if he would like to revoke her as a beneficiary.

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Questions 33

Melissa owns a disability insurance policy from Clarity Life. She makes her premium payment on the second day of each month, but this month, she misses the payment deadline. A week passes before she realizes her oversight. She makes a frantic call to Jonathan, a Clarity Life customer service representative. Jonathan explains about notices of termination. Which of the following responses is CORRECT?

Options:

A.

Melissa's policy was cancelled 24 hours after she missed her payment, and Clarity mailed her a notice of termination.

B.

Melissa's policy would only be cancelled 30 days after the due date of her missed premium payment.

C.

Melissa's policy has a grace period and would not be cancelled until 10 days after Clarity Life mails her a notice of termination.

D.

Melissa's policy has a grace period and would not be cancelled until 15 days after Clarity Life mails her a notice of termination.

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Questions 34

Mike and Todd are both agents with Superior Insurance Company. Every Friday, they have lunch together at the local pub. One Friday, Mike forgets his wallet, so Todd pays both bills. Mike has a sales appointment that afternoon, where he will be signing a small term life insurance policy on a child. He decides to simply indicate that Todd is the agent of record so that Todd gets the compensation for the sale—an easy way to pay him back for lunch! What practice is Mike engaging in?

Options:

A.

Tied selling.

B.

Fronting.

C.

Churning.

D.

Misrepresentation.

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Questions 35

Andre, an insurance agent, meets with his client Jasper to discuss his $150,000 whole life insurance policy. Jasper is deeply indebted and needs at least $40,000 to cover his debt. Andre tells him about a company he knows that will be willing to give him $75,000 if he assigns his policy to them. Did Andre act appropriately?

Options:

A.

No, because Jasper is not allowed to assign his policy to an arms-length entity.

B.

No, because trafficking in insurance is discouraged by the insurance industry.

C.

Yes, because he is helping his client pay off his debt.

D.

Yes, as long as this practice is not illegal in his province of residence.

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Questions 36

Brian gives his lawyer Dave $200,000 that will be used as a down payment to purchase a condo. Brian received these funds from his mother’s life insurance death benefit. The money is deposited into Dave’s trust account. Unbeknownst to Brian, Dave is going through financialhardship. If Dave files for bankruptcy while Brian's funds are still in his trust account, can the bankruptcy trustee seize the funds?

Options:

A.

Yes, because the account is in Dave’s name.

B.

Yes, because life insurance benefits, once paid out, are seizable.

C.

No, because the money does not belong to Dave.

D.

No, because trust accounts are protected from seizure by creditors.

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Questions 37

Genevieve and Martin, a couple in their 40s, meet with Melissa, their insurance agent, to help them plan for their retirement. Melissa tells them that they would benefit from opening a spousal registered retirement savings plan (RRSP) given their financial situation and discrepancy in their incomes. The couple would like to know the benefits of opening a spousal RRSP.

Options:

A.

A spousal RRSP is a way to move income from one spouse, who has a higher tax rate, to the other, who has a lower tax rate, during retirement.

B.

Contributions to a spousal plan are based on the contribution room of the recipient and reduce his or her RRSP contribution room.

C.

Contributions to a spousal plan can be made until the end of the year in which the older spouse turns 71.

D.

Having a spousal RRSP can extend the tax benefit of contributions past age 71 if the contributing spouse is younger.

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Questions 38

Konrad is the owner of CrossBoy, a manufacturing company employing over 50 employees. Konrad recently took out a $500,000 loan to expand his business. Terrence works as a sales manager and is responsible for roughly 40% of the company’s revenue. Konrad recognizes the importance of Terrence's contributions to the success of the company. Therefore, in addition to a sizeable basesalary, CrossBoy also pays Terrence regular performance-based bonuses. Konrad understands that if Terrence dies prematurely, CrossBoy would suffer financially. What should he do to protect his company?

Options:

A.

Offer Terrence group life insurance plan.

B.

Purchase business-owned buy-agreement with Terrence.

C.

Purchase key person life insurance on Terrence.

D.

Purchase criss-cross insurance with Terrence.

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Questions 39

David, a respected career life insurance agent in his city, has a lot of older clients because he has been selling insurance for 35 years. One such senior, Craig Wilson, is 79 years old with a $150,000 universal life policy that he purchased in his 40s. Craig has several medical issues and may not live too much longer. Craig wants to create a bucket list in his final days but he has no savings to do the things he wants. So he contacts David to see if there is someone who can give him $50,000 now in exchange for the $150,000 insurance payout at his death. David knows a wealthy businessman who would purchase this policy as Craig wishes. What practice is David engaging in?

Options:

A.

This is referred to as "churning."

B.

This is referred to as "anti-selection."

C.

This is referred to as "trafficking."

D.

This is referred to as "tied selling."

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Questions 40

(Anthony, 26, wants to invest $500 but be able to cash it in anytime without fees and wants capital protection.

What investment should the insurance agent recommend?)

Options:

A.

An IVIC consisting of a growth fund with a 100% maturity guarantee.

B.

An IVIC consisting of a bond fund with a deferred sales charge.

C.

A redeemable guaranteed investment certificate.

D.

A market-linked guaranteed investment certificate.

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Questions 41

(At 60 years of age, Pierre recently retired for health reasons: he suffers from leukemia and is only expected to live three or four more years, according to his oncologist. A friend advised Pierre to purchase an annuity with his RRSP, as he has no immediate family to leave money to and wants a guaranteed monthly payout.

What type of annuity would be best suited for Pierre?)

Options:

A.

A term annuity.

B.

A life annuity.

C.

An enhanced annuity.

D.

A deferred annuity.

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Questions 42

(Suzie began her career with a large law firm five years ago. She earns an excellent income and saves $5,000 annually through a financial advisor. Her advisor placed her in a conservative fund within a TFSA. Suzie wanted to save for retirement and maximize tax deductions.

Based on this information, what conclusion can be drawn about Suzie’s savings program?)

Options:

A.

It is adequate.

B.

It is not adequate: an RRSP would have been better than a TFSA.

C.

It is not adequate: it should at least be better diversified.

D.

It is not adequate: it should be better protected from potential creditors.

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Questions 43

(Philip is applying for a segregated fund contract and must choose a sales charge. He does not foresee needing withdrawals and wants minimal management expenses and no initial reductions or penalties.

Which form of sales charge would best suit Philip?)

Options:

A.

A deferred sales charge

B.

A no-load fund

C.

A front-end sales charge

D.

A negotiated sales charge

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Questions 44

Planet Source decides to implement a defined contribution pension plan (DCPP) for its 75 employees. The company's president appoints Josie, the human resources director, as the plan administrator.

Which of the following BEST describes Josie's responsibility as a plan administrator?

Options:

A.

To manage the pension plan

B.

To amend the pension plan

C.

To address funding shortfalls

D.

To set the benefit structure

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Questions 45

(Helmut, a Canadian resident for 10 years, invests $25,000 in a segregated fund within an RRSP. The agent processes the transaction without asking for proof of identity.

According to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), what is the conclusion about the agent’s action?)

Options:

A.

He has violated the identification requirements because the amount of the transaction is more than $10,000.

B.

He has not violated the identification requirements because the amount is less than $100,000.

C.

He has violated the identification requirements because the agent previously completed just one transaction for Helmut.

D.

He has not violated the identification requirements because the amount was deposited in a registered account.

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Questions 46

Six years ago, Diu purchased an immediate life annuity with a 10-year guarantee period. The annuity paid her a monthly benefit of $1,800. She named her son Shan as the beneficiary of the policy and her niece Haru as a contingent beneficiary. Shan died four months ago in a motorcycle accident and between grieving and planning the funeral, Diu forgot to update her beneficiary designation. Last week, Diu died of a heart attack.

Who would receive the annuity benefits?

Options:

A.

Shan's widow

B.

Shan's estate

C.

Haru

D.

Diu’s estate

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Questions 47

(Clara is saving for a house and will likely need her money within a year. She seeks a segregated fund with minimal penalties for quick access.

Which sales charge should Irving recommend?)

Options:

A.

No-load

B.

Front-end load

C.

Deferred sales charge

D.

Trailing commission

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Questions 48

(Ten years ago, Yamina invested $2,500 in a segregated fund contract with a 75%/100% guarantee structure. The market value of the contract peaked at $4,500 but then fell. Now, at maturity, the units are worth $2,250.

How much can Yamina expect to receive?)

Options:

A.

$3,375

B.

$2,500

C.

$2,250

D.

$1,875

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Questions 49

(Arthur's assets include a home worth $744,000, savings of $41,000, and a whole life insurance policy with a death benefit of $300,000 and a cash value of $196,000. His liabilities include a $150,000 reverse mortgage and $2,090 income tax owed.

What is Arthur's net worth?)

Options:

A.

$1,082,910

B.

$932,910

C.

$828,910

D.

$678,910

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Questions 50

Ten years ago, Albert purchased a life insurance policy and designated his brother Stephen as the sole beneficiary. Albert is single and Stephen is his only family. Albert is a frequent traveler and enjoys doing exotic sports in South Africa. During his trip in South Africa in July 2019, there was a heavy earthquake in the region and a lot of the buildings fell apart. It was reported that Albert could be drinking in one of the restaurants when the disaster happened. His body was not located at that time. The South African government declared the incident as a national disaster. After the incident, Stephen got a letter from the life insurance company indicating Albert’s life insurance was in grace period and a payment was required or it will lapse on August 15, 2019. Two weeks have passedsince the mail arrived and the grace period is over. The policy is now lapsed because Stephen was occupied with Albert’s disappearance. On October 1, 2019, Albert’s body is finally located in one of the building ashes. The coroner’s report indicated he died when the building collapsed. What should Stephen do to handle the life insurance matter?

Options:

A.

Stephen should make a death claim because Albert died on the day when the earthquake occurred.

B.

Stephen would not be able to make a claim because the policy already lapsed.

C.

Stephen would not be able to make a claim because the coroner’s report came out after the policy lapsed.

D.

Stephen could bring the policy back in force by telling the insurance company what happened and start paying the premium again.

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Questions 51

(Joe and Joy, both aged 65, have $280,000 in savings and a $200,000 joint first-to-die life insurance policy. They want to buy an annuity to provide steady income in retirement.

What type of annuity would best suit their needs?)

Options:

A.

A single life annuity, as their life insurance policy will fund the survivor’s retirement.

B.

A joint life annuity that will pay the survivor 50% of the full benefit.

C.

A T-90 annuity that will provide an income until at least the first death.

D.

A variable income annuity that can provide larger sums if the market performs well.

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Questions 52

Thien is 56 years old and has recently been diagnosed by his doctor with a heart condition for which there is no known treatment, and which has dramatically reduced his life expectancy. Thien has decided to take early retirement. Fortunately, after 30 years of service working as a credit officer at a local bank, he has accumulated a large sum in his pension plan. Thien's wife supports his decision to retire early. She is 49 and in good health, and plans to continue working and earning a lucrative income at her current position as a divorce lawyer at a prestigious law firm, at least until she reaches 65 years of age.

What type of annuity would BEST suit Thien's needs?

Options:

A.

Life annuity with a 15-year guarantee.

B.

Life annuity.

C.

Joint life annuity.

D.

Impaired life annuity.

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Questions 53

Aadi is retiring from Scotia Grand, his employer of 25 years. While employed, Aadi benefitted from the company's deferred profit sharing plan (DPSP) and over the years, he accumulated $75,000.

Where should Aadi transfer these funds on a tax-deferral basis, now that he is retired?

Options:

A.

A group tax-free savings account (TFSA).

B.

A group registered retirement income fund (RRIF).

C.

A group life income fund (LIF).

D.

A locked-in retirement account (LIRA).

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Questions 54

Lily works for Cloud 9 Inc. She earned $120,000 in Year 1 and $125,000 in Year 2. Lily contributes 5% of her income into a defined contribution pension plan (DCPP), and this contribution is matched by the employer. Lily has unused contribution room of $15,000 andwants to know how much she can contribute to her registered retirement savings plan (RRSP) in Year 2.

Options:

A.

$24,600

B.

$25,000

C.

$30,600

D.

$31,250

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Questions 55

Karine receives $200,000 from her mother's estate and decides to purchase an annuity. Her insurance agent Serge goes over her options with her, and she chooses the annuity that best suits her needs. Serge proceeds with the transaction.

Which of the following statements about the transaction is TRUE?

Options:

A.

Karine may make a cash deposit.

B.

Serge has 3 business days to forward the payment to the insurer.

C.

Serge should provide a receipt for all deposits he receives as cash, cheque, or bank draft.

D.

If Karine writes a cheque, it should be made payable to Serge.

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Questions 56

Tyler, a group insurance agent, is meeting with Yolanda, the director of his new group insurance client, Compact Funds Inc., to set up the company’s plan. Compact Funds employs over 30 employees, and Tyler recommends that they implement a contributory plan. Yolanda would like to understand what this means. Which of the following statements about contributory plans is CORRECT?

Options:

A.

The insurer will bill each employee who will then ask for Compact Funds to credit a portion of the premiums on the payroll.

B.

The insurer will bill Compact Funds, and they will deduct the requisite premium from each employee's paycheck.

C.

The insurer will bill Compact Funds and each employee individually.

D.

The insurer will bill each employee directly, and they will pay 100% of the premiums.

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Questions 57

Dora meets with the following clients, each of whom fills out a disability insurance application:

• Scott, a ski instructor who skydives every weekend in the summer,

• Lamar, a librarian who drives to work daily and spends his free time collecting stamps and watching nature shows,

• Timothy, an administrative assistant who walks 30 minutes each way to and from work, and

• Yashar, an accountant who participates in 5 online chess competitions a week and studies chess in his spare time.

All else being equal, which of Dora’s clients will qualify for the most favorable insurance premium?

Options:

A.

Scott

B.

Lamar

C.

Timothy

D.

Yashar

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Questions 58

Arthur is a 79-year-old long-term care (LTC) policyholder whose daughter, Sheila, visits daily to help him get dressed and prepare meals. Sheila wants him to enter a nursing home because heisunable to dress himself. Though he cannot prepare his own meals, he can still feed himself, and once undressed, he can wash himself, seated in the bathtub.

Is Arthur eligible to receive LTC benefits?

Options:

A.

Yes, Arthur is eligible because he cannot dress himself or prepare his own meals.

B.

Yes, Arthur is eligible because he is unable to dress himself and he must sit in the bathtub to wash himself.

C.

No, Arthur is not eligible because even though he cannot prepare his own meals, he is able to feed himself.

D.

No, because except for dressing himself, Arthur can perform all the other activities of daily living.

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Questions 59

Luc is married and the father of two teenagers. His annual salary is $60,000. His wife Marie works part-time with an annual salary of $24,000. The family’s monthly expenses are $3,500. Luc and Marie are not members of any group benefit plan. What is the minimum monthly amount of disability insurance coverage that Luc needs to cover his risk of disability?

Options:

A.

$1,500

B.

$3,500

C.

$5,000

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Questions 60

Vintage Style Inc. is a clothing company with 20 employees participating in its group retirement and group insurance plan. Premiums for the group insurance plan are calculated on previous claims. If the benefits paid are lower than anticipated, the premiums may decrease at renewal. However, if the benefits paid are higher than anticipated, the premiums payable may be subject to an increase.

Which of the following funding formulas does Vintage use in its group insurance plan?

Options:

A.

Non-refund accounting.

B.

Refund accounting.

C.

Administrative services only.

D.

Claims experience.

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Questions 61

Lara, owner of Huck’s Oil Change Ltd., meets with a life insurance agent to discuss a renewal package for the group benefits plan offered to employees. Lara employs 20 individuals, all of whom are covered under the group plan. The employee turnover rate is 10%, and the insurer has rated the group’s claims experience credibility at 20%. In establishing the group’s premiums under the new plan, how much weight will the insurer give to the standard manual rate for a comparable group?

Options:

A.

10%

B.

20%

C.

80%

D.

90%

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Questions 62

Xavier meets and fills out an application form with Jose, an insurance representative, because he would like to purchase a critical illness insurance policy. When Jose asks Xavier about his alcohol consumption, Xavier admits he regularly drinks 10 beers a day.

What is the next step in the application process?

Options:

A.

The insurance company will automatically refuse the application.

B.

The insurance company will accept the application with an exclusion for alcohol consumption.

C.

Jose should refuse the request.

D.

Xavier will have to fill out a questionnaire detailing his alcohol consumption.

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Questions 63

Harper owns a disability insurance policy that will pay her a monthly benefit if she becomes unable to work. At the time she applied for the policy, Harper was a new graduate with an annual income of $60,000, and she qualified for a monthly benefit of $3,000. Instead of taking the maximum benefit, she focused on paying off her student loans and keeping her insurance premiums low. She elected to purchase a monthly benefit of $2,500 and add the future purchase option (FPO) rider for up to $500 a month of additional coverage. Now she is further along in her career, Harper earns $100,000 a year, and she meets with her insurance agent Trish to increase her coverage. Harper would like her new monthly benefit to be $5,000.

Which of the following statements about Harper’s coverage is TRUE?

Options:

A.

If Harper wants to increase her coverage, she will have to apply for an additional $2,500 of monthly benefit with full medical underwriting.

B.

Harper cannot apply to receive an additional $2,000 of coverage, but she can exercise the FPO and increase her monthly benefit by $500.

C.

Harper can exercise the FPO and increase her monthly benefit by $2,500.

D.

Harper can exercise the FPO, increase her monthly benefit by $500, and apply for an additional $2,000 of monthly benefit with full medical underwriting.

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Questions 64

Abraham lives in Alberta. He meets with a life insurance agent to discuss the purchase of an individual extended health insurance plan. Abraham is interested in a plan that would cover him, his wife, and their two young children. Here are some of the features of the plan that most closely meets Abraham’s needs: prescription drug coverage with a $50 annual deductible and 80% co-insurance, and dental coverage with a $100 deductible and 70% co-insurance on preventative services. However, Abraham asks the agent to present a plan with a cheaper premium. What changes would the agent have to consider in order to present a plan with a lower premium than the one described above?

Options:

A.

Lower deductible on prescription drug coverage, higher deductible on preventative dental services.

B.

Higher deductible and lower co-insurance on prescription drugs, lower deductible and lower co-insurance on preventative dental services.

C.

Higher deductible and lower co-insurance on prescription drugs, higher deductible and lower co-insurance on preventative dental services.

D.

Lower deductible and higher co-insurance on prescription drugs, lower deductible and higher co-insurance on preventative dental services.

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Questions 65

Eric is an architect who owns his own firm. He employs three staff and is in his fifth year of operation. While recently meeting with his insurance agent for an annual review of his coverage, he mentioned to the agent that he had recently purchased a new printing system and has a sizeable loan on it. In the event of disability, what type of insurance coverage could the agent suggest to ensure the loan payments are made?

Options:

A.

Key person disability insurance.

B.

Business overhead expense disability insurance.

C.

Disability buyout insurance.

D.

Business loan protection disability insurance.

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Questions 66

Diane is an insurance agent working for Gamma Insurance Inc. who is responsible for coaching a newly licensed agent, Wick. Wick has questions about his role, and he would like to know how he should service his clients.

What should Diane tell Wick about what is expected of him?

Options:

A.

He must keep detailed notes about the services provided to clients.

B.

He must deliver to clients, newly issued policies within 30 days of acceptance.

C.

He must fill out the claim forms for his clients.

D.

He must contact his clients on a quarterly basis.

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Questions 67

Wesley is a self-employed plumber. He meets with a licensed life insurance agent to explore his options regarding disability insurance. Wesley’s earnings have been stable over the past few years.His business generates gross income of $120,000 annually and write-off expenses of $30,000. Wesley’s average income tax rate is 30%. What income amount should be used to calculate the maximum disability benefits Wesley is entitled to?

Options:

A.

$120,000

B.

$90,000

C.

$84,000

D.

$63,000

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Questions 68

Jonas recently graduated with his engineering degree and is joining the Alberta Engineering Association. He is informed that the association offers a group plan to all members. Jonas wants to join the plan but wishes to know who will pay the premiums for the coverage.

Which of the following answers is CORRECT?

Options:

A.

The members must pay 100% of the premiums.

B.

The Association will pay 100% of the premiums.

C.

The premiums are split between the members and the association.

D.

Initially, the members must pay 100% of the premiums but after 3 years in the plan, the premiums are split with the association.

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Questions 69

On June 5, Karl completed an application for critical illness coverage and paid an annual premiumof $1,250. On June 25, the underwriter approved the policy under standard conditions and sent it to the agent, who received it on July 7. The agent contacted the client on August 8 and the date for delivery was set at August 10. On August 12, Karl learns that he will lose his job at the end of the month. As such, he decides to cancel the policy, returning it to the insurer on August 15. What is the rule governing Karl’s right to have his premium refunded?

Options:

A.

He is entitled to a refund, because the policy was returned within 10 days of delivery.

B.

He is not entitled to a refund, because the policy was approved more than 30 days ago.

C.

He is entitled to a refund, because the representative delivered the policy more than 10 days after its issuance.

D.

He is not entitled to a refund, because the application was signed more than 30 days ago.

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Questions 70

Kevin owns a construction business and wants to take out accident and sickness insurance to protect his income in the event of disability. On his application form, he indicated that he had competed in motocross races over the past five years. What requirements does Kevin need to comply with before the insurer can issue the policy?

Options:

A.

Kevin only needs to answer the medical questions.

B.

Kevin only needs to specify how often he engages in the sporting activity.

C.

Kevin needs to complete a special questionnaire, as well as specify how often he engages or intends to engage in the sporting activity in the future.

D.

Kevin needs to complete a special questionnaire as well as specify how often he engages or intends to engage in the sporting activity in the future; thus, an exclusion rider may be required by the insurer.

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Questions 71

Mauro works full-time for a small company that offers no benefits. He earns $40,000 a year. He has an individual disability insurance policy that would provide him with $2,000 a month, for a maximum of two years, after a waiting period of four months. This policy includes a partial and residual disability rider. Injured in an accident, Mauro is completely unable to work for nine months. After that, Mauro’s doctor advises him to start working two days a week for the next three months, after which Mauro should be able to resume working full-time. What monthly benefit will Mauro receive during the period he works part-time?

Options:

A.

$1,600

B.

$1,200

C.

$1,000

D.

$800

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Questions 72

Jasper owns TeleVida, a successful production company with over 50 employees. He wants to expand the company by opening an office in another province. Jasper needs to take out a $500,000 20-year loan to make this expansion happen. However, he wants to make sure that if hedies while there’s an outstanding balance on the loan, the balance will be paid in full by the insurance company.

Options:

A.

20-year decreasing term life insurance.

B.

20-year term life insurance.

C.

Term-100 life insurance policy.

D.

Universal life insurance policy.

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Questions 73

Johann owns a $250,000 whole life insurance policy. The policy has a cash surrender value (CSV) of $55,000 and an adjusted cost basis (ACB) of $30,000. Johann would like to cancel his policy and use the cash surrender value to fund a new business. If his marginal tax rate is 40%, how much will he have left after cancelling his policy?

Options:

A.

$30,000

B.

$33,000

C.

$45,000

D.

$55,000

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Questions 74

Anita is a 50-year-old woman who is thinking of purchasing a $150,000 permanent life insurance policy to pay for the capital gains tax that will be payable on her country home upon her death. She had purchased the home twelve years ago and wants to bequeath the property to her niece when she dies.

Which of the following features about a permanent insurance policy is TRUE?

Options:

A.

The coverage ends when Anita turns 100.

B.

The premiums will remain level for the duration of the contract.

C.

The policy cannot be cancelled by Anita.

D.

Anita must contact the insurer if there is a change in the insurability.

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Questions 75

Harold is a 66-year-old retired school bus mechanic. He receives $900 a month from his defined benefit pension plan (DBPP). His husband Karl is also retired and receives his own pension benefit. Harold would like to know the minimum monthly pension benefit from his DBPP that Karl will receive upon Harold's death.

Options:

A.

$0

B.

$450 to $495 depending on the province they reside.

C.

$540 to $594 depending on the province they reside.

D.

$900

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Questions 76

Coraline owns a $250,000 whole life insurance policy. She purchased the policy last year and does not have any funds accumulated in her cash surrender value (CSV). On December 30, Coraline assigns the policy to the cancer foundation, and she plans on continuing to pay the $200 monthly premium. Coraline calls her accountant James to ask him how much of her donation she will be able to use to obtain a charitable tax credit this year.

Options:

A.

$0

B.

$200

C.

$2,400

D.

$250,000

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Questions 77

Aari and Jonila are a married couple in their late sixties. They both enjoy a comfortable retirement. Both receive regular payments from their pension plans, Old Age Security (OAS) and Canada Pension Plan (CPP). They own a house and a cottage that are both mortgage-free. They also have over $500,000 in savings and investments. They know that if one of them dies, the surviving spouse will be financially comfortable. The couple has two grown children to whom they would like to leave all their assets when they die. The couple informs Herbert, their insurance agent, that they want to make sure when they die that their children have the funds needed to pay the taxes on the assets that they will bequeath them.

Which life insurance policy would be most suited to meet the couple's needs?

Options:

A.

A permanent joint last-to-die policy on Aari and Jonila.

B.

A permanent joint first-to-die policy on Aari and Jonila.

C.

A term joint last-to-die policy on Aari and Jonila.

D.

A term joint first-to-die policy on Aari and Jonila.

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Questions 78

Joseph, a retired jeweler, meets with Larry, an insurance agent with Summit Life Co., to review Joseph's life insurance needs. Joseph has made it clear in his will that upon his death, his son will inherit his collection of diamond necklaces, valued at $1.8 million.

What type of asset is Joseph's diamond necklace collection considered to be?

Options:

A.

Liquid asset.

B.

Investment asset.

C.

Fixed asset.

D.

Pension asset.

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Exam Code: LLQP
Exam Name: Life License Qualification Program (LLQP)
Last Update: Apr 28, 2025
Questions: 262

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