Free Life License Qualification Program (LLQP) Exam LLQP Exam Practice Test

Goran and Tanja married two years ago. Last year, they purchased and moved into a three-bedroom house in the suburbs. The current balance on their mortgage is $655,000. They meet with Ljubomir, an insurance agent, to purchase a joint term life insurance policy to cover the mortgage. When Ljubomir asks about their existing coverage, Goran shares that he has none. Tanja explains that she owns a universal life (UL) policy with a level death benefit of $50,000 and a cash surrender value (CSV) of $5,000, purchased 6 years ago from another agent. Tanja would like to surrender her UL policy and use the $5,000 CSV to pay for a trip to Europe. What additional information about Tanja's UL policy does Ljubomir need to collect?

• The investment vehicle of the policy's CSV.
• The adjusted cost basis (ACB) and surrender charges of the policy's CSV.
• The dividends and paid-up additions.
• The premiums upon renewal.

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?

• Yes, because she changed her beneficiary designation to hinder creditors.
• Yes, because she has money accumulated in her cash surrender value.
• No, because her husband is a protected class beneficiary.
• No, because the creditors can only go after the restaurant's assets.

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 and wants to know how much she can contribute to her registered retirement savings plan (RRSP) in Year 2.

• $24,600
• $25,000
• $30,600
• $31,250

Which organization provides protection for holders of segregated fund contracts in Canada if the insurer becomes insolvent?

• Canadian Deposit Insurance Corporation
• Canadian Insurance Services Regulatory Organizations
• Assuris
• OmbudService for Life & Health Insurance

Rowan works for a construction company that employs 40 employees. The company is newly established, and the owners have yet to implement a group insurance policy. Rowan falls off the side of a building and breaks his collar bone. The doctor informs him that he will be unable to work for five months.Who will pay him disability benefits while he is recuperating?

• His employer.
• Employment Insurance.
• Canada Pension Plan.
• Workers' Compensation.

Emeka, a new insurance agent with Sunrise Insurance, meets with her client, Mosi. After analyzing Mosi's needs, Emeka determines that Mosi's current life insurance coverage with Starlight Insurance is more than sufficient. Nevertheless, she persuades Mosi to cancel his existing coverage and buy a new life insurance policy with Sunrise Insurance. She believes this is a good compromise because Mosi will have the coverage he needs, and the new transaction will pay her a commission. Which of the following offences did Emeka commit?

• Inducing to insure.
• Twisting.
• Churning.
• Fronting.

Dakota is the owner of Fresh Drapes, a home decoration company. She opened her business five years ago when she quit her day job, took out loans, and put all her life savings into opening her store. Her business is doing well, so she meets with Tanya, an insurance agent, to start investing for her retirement. After completing a thorough needs analysis, Tanya suggests that Dakota purchase segregated funds and name her husband as the beneficiary of the funds.Which of the following offers the GREATEST benefit to Dakota by investing in segregated funds over other types of investments?

• Diversification
• Maturity and death benefit guarantees of 100%
• Professional management
• Creditor protection

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?

• No, because Jasper is not allowed to assign his policy to an arms-length entity.
• No, because trafficking in insurance is discouraged by the insurance industry.
• Yes, because he is helping his client pay off his debt.
• Yes, as long as this practice is not illegal in his province of residence.

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?

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

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?

• Zaid
• Omar
• Darwish
• Baheya’s succession