Life License Qualification Program (LLQP) Questions and Answers
(Justin purchased a single life annuity contract with no guaranteed period and no survivor benefit. He is now hospitalized.
If Justin passes away, who could make a claim on behalf of his estate regarding the annuity?)
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.
(Vanessa, a grandmother, wants to set up a savings account for her six-month-old granddaughter Brienne’s future education, making a lump sum and regular contributions.
Which account is best suited?)
Jessica is 61 years old and has $460,000 invested in a registered retirement savings plan (RRSP). She is retiring due to health issues that are expected to reduce her life expectancy and will prevent her from working until she is 65. She would like to transfer her RRSP funds into an annuity that will pay her monthly benefits for the rest of her life.
Which of the following annuities is the BEST option for her to purchase?
Over the years, Agnes, a disciplined investor with a modest income, was able to save over $140,000 in an accumulation annuity. She plans on using the funds in a few years to travel the world and enjoy life while she is still healthy.
Which of the following statements about her annuity is TRUE?
(Kara's uncle recently passed away, leaving her an inheritance. Since Kara does not hold any investment account and is not sure what to do with this unexpected influx of money, her cousin referred her to his own financial advisor.
What information should the advisor first seek to obtain from Kara to begin developing an investment strategy that meets her needs?)
Naomie meets with her new client, Keisha, to review her investment portfolio. Keisha is a 43-year-old sales representative who has been with Belmont Inc., a large pharmaceutical company, for 15 years. She earns a generous salary, plus bonuses. She also has a group tax-free savings account (TFSA) and a defined contribution pension plan (DCPP), all of which are invested in Belmont common shares.
What main need does Naomie have to address regarding Keisha’s investments?
Emma, an employee at MagicLand, is part of the company's group registered retirement savings plan (RRSP). During her tenure, she accumulated over $70,000 in the plan and all of her contributions are invested in segregated funds. She meets with Jun to invest in an individual segregated fund. Jun tells her that there are some differences between group and individual segregated funds.
How are Emma's group segregated funds DIFFERENT from an individual segregated fund?
Hussein wants to purchase a segregated fund. He has been following the news and believes the pharmaceutical sector will take off soon, and he wants to purchase a fund that will capitalize on his market view. He understands market fluctuations and is comfortable with the level of risk involved because he would only need to access these funds in 20 years.
Which of the following would be the most appropriate fund for Hussein?
(Julia deposited capital into an annuity contract that will start payments in three years and continue for 10 years. She is the annuitant; her son Ethan is the beneficiary.
What type of annuity has Julia purchased?)
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?
Leonard and Ashley, a couple in their early 30s, meet with Howard, an insurance agent, to review their investment needs. Leonard earns $60,000 a year as a research physicist, and Ashley earns $25,000 as an actress. They each have $3,000 in their respective chequing accounts. Leonard also has $40,000 invested in his group registered retirement savings plan (RRSP). Ashley has a Subaru WRX worth $20,000 with a car loan of $10,000. Leonard does not own a car, but he has an outstanding student loan of $30,000.
What is the couple's net worth?
(Samuel works for a major company offering a GRRSP and a group TFSA.
How do Samuel’s contributions to the GRRSP differ from his contributions to the group TFSA?)
(Eric, aged 28, currently works for an accounting firm. He still lives with his parents but is saving to buy a place of his own. Seven years ago, his grandparents gave him a significant cash gift following his college graduation. He deposited it into a segregated fund that invests in the natural resources sector. However, real estate prices are rapidly increasing. Eric is concerned that if he does not buy a place in the next three to five years, it might become altogether unaffordable. In addition, the shares of the segregated fund he holds have seen a sharp drop in market value two years ago and they have not recovered yet.Eric questions his current choice of investment and asks his life insurance agent if he should switch to a different type of segregated fund.
What should the agent recommend?)
(Laurent, age 45, is married with three children. He has no pension plan but contributes to an RRSP. His insurance agent recommends segregated funds but Laurent worries about losing his money if the insurer encounters financial difficulty.
What protection should the agent talk about to reassure Laurent?)
(Harry, aged 60, recently sold his business and plans to invest $100,000 in segregated equity fund contracts. He wants to minimize costs but has a family history of early death.
What maturity and death benefit guarantees would be most appropriate?)
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?
Samya and Gary, who are both insurance representatives, are having lunch together. Gary has been very successful for several years and proposes a scheme to Samya to get insurance proposals signed for a fictional company they would create together. He believes that this system would make them millionaires in about ten years. Gary advises Samya to keep their conversation a secret. If Samya agrees to Gary’s proposal, what sanctions could she face?
Sabrina is an insurance representative with an insurance of persons certificate issued by the Autorité des marchés financiers (AMF). Her client, Stephanie, is a Quebec resident who accepted a job with Service Canada, in Ottawa, and purchased a condo there. Stephanie calls Sabrina to explain that her new job requires her to work in Ottawa three days per week, but she is still a Quebec resident; she spends four days a week with her family in Granby, Quebec. Stephanie asks Sabrina if she can buy mortgage insurance from her to help cover the mortgage on her new condo.
What should Sabrina answer her?
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?
A few months ago, Urmish filed a complaint to the Autorité des marchés financiers (AMF) about the services he received from his insurance agent, Jaba. The complaint was heard by the discipline committee, and Jaba was found guilty and ordered to pay a $10,000 fine. Jaba is upset and does not agree with the verdict. She would like to appeal the verdict.
Which of the following statements is CORRECT?
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?
Adèle retired a few months ago. She sold some of her assets and would like to use the funds to take out a term annuity to increase her retirement income. Adèle brings a $300,000 cheque to Germain, her financial security advisor, and wants to begin receiving lifetime guaranteedbenefits in one month with the right to use capital in the event of an emergency. When Germain tells her about alienating capital, the capitalization phase, and the payment phase, Adèle becomes confused and asks for clearer explanations. What can Germain say to help Adèle understand?
Insurer ABC analyzed the disability claim of Monique, who says she is going through a serious depression that is keeping her from being able to do her work. Unfortunately, the insurer believes that Monique is fit to work. She asked the insurer to revise her position but has received a final letter from the insurer refusing to pay her short-term disability benefits. What recourse does Monique have if she does not want to consult a lawyer just yet?
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?
Marietta receives a summons from the syndic of the CSF regarding an investigation into her associate. The summons was delivered to her office on May 2 and she took notice of it on May 4. The summons requires her to receive the syndic representative at her office on May 19 at 8:30 a.m. Marietta has already planned for and reserved a week off for a vacation abroad from May 15 to 22. She immediately emails the syndic representative to inform him that she will be out of the country and cannot be present on the 19th. She proposes meeting on the 14th or the 23rd ofthe same month. Pursuant to the Code of Ethics of the Chambre de la sécurité financière, which duties or obligations has Marietta breached?
Alec is sure he sent his insurer his annual life insurance premium payment. The insurer did not receive it, however. The insurer then sent Alec a notice of non-payment of premiums, but Alec had moved in the meantime. Therefore, he never got the notice, even though he had emailed hisfinancial security advisor, Olivier, to inform him of his change of address. Unfortunately, Olivier was on a leave of absence and no one else in the firm took over the file. As a result, the policy lapsed. Alec sent Olivier’s firm several emails to complain, but no one responded. Which organization can Alec turn to?
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?
Last week, at a dinner party, Dario, an insurance agent, met Andrew, a successful businessperson with a net worth of over $10 million. Dario spent the evening following Andrew around, telling him how he could help him manage his finances. The day after the meeting, Dario sent a fruit basket to Andrew's office. Every day since, Dario has been calling and urging Andrew to meet with him and take advantage of his services and insurance products.
Which duties and obligations did Dario break?
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?
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?
Patrick, an insurance of persons representative, gives a talk about his work to high school students. He tells them about his previous day’s activities. Which activity is considered ethical misconduct?
Oliver, an insurance agent, meets with Roman and Julie. They are a married couple with a five-year-old son William. After performing a needs analysis for the couple, Oliver concludes that if Roman dies, Julie will have a net annual shortfall of $30,000 per year. Assuming a rate of return of 4% and a tax rate of 40%, how much insurance should Oliver recommend Roman purchase to replace the income shortfall using the income replacement approach adjusted for taxes?
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A number with numbers and lines Description automatically generated with medium confidenceFrancis 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.
Jasper is the sole breadwinner in his family. His wife Stephanie has chosen to dedicate all of her time to raising their 3 young children. Luckily, Jasper earns a monthly after-tax income of $25,000 working as a family doctor in the local clinic. Jasper meets with his insurance agent Odda to purchase a life insurance policy that will ensure his family will be able to continue toenjoy their current lifestyle in the event of his death. If his average tax rate is 40% and the investment return is 4%, how much life insurance should Jasper purchase based on the income replacement approach?
A close-up of a math Description automatically generatedGoran 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?
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?
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.
Bea is a married 65-year-old woman applying for a life insurance policy. She meets with Stanley, her insurance agent, to review her insurance needs. Stanley inquires if Bea has started receiving Old Age Security (OAS) and Canada Pension Plan (CPP) benefits. Why is it important for Stanley to know this?
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?
Six years ago, when Kacey was working as an active firefighter, she purchased a $200,000 30-year term life insurance policy. At the time, the insurance company rated her policy. Recently, she changed roles and now works for the fire department’s public relations office, answering media calls and filling out paperwork. She meets with her insurance agent, Bernice, to ask if the insurer would consider reducing her premiums.
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?
Maeve is an Ontario resident. Fifteen years ago, she purchased a $250,000 whole life insurance policy and named her husband Guillaume as the primary beneficiary and her 4-year-old son Edwin as the contingent beneficiary. Last week, Tasha, Maeve's insurance agent called her to ask if she has had any life changes that would warrant a meeting to review her insurance coverage. Maeve informs her that over the last year she divorced Guillaume and that she is now living with her new boyfriend Eduardo. Tasha asks to meet Maeve to review her beneficiary designation. Who will receive Maeve's death benefit if she dies today?
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.
Dr. Kumar owns a 10-year term life insurance policy with a level death benefit of $500,000 issued by Expert Health & Life Inc. The policy is renewable, convertible to age 70, and contains no additional riders. Dr. Kumar is the life insured. She is single, has no dependents, and her estate is named as the policy’s beneficiary. The current premiums are $365 per year, based on standard health, non-smoker rates. As the policy is due to renew in a few months, Dr. Kumar meets with Kavya, an insurance agent referred to her by a mutual friend. Kavya reviews all of the information presented above, but notices a missing detail.
What additional information about Dr. Kumar's policy does Kavya need to complete her review?
Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem and only visits them sporadically. Vladimir's younger brother Sergei, on the other hand, is a dependable and helpful uncle who helps Svetlana regularly with the children. Svetlana meets with Robert, an insurance agent to review her life insurance needs because she wants to make sure that her children are taken care of if she were to die prematurely. Robert suggests that she purchase a $200,000 policy. Who should she name as a beneficiary?
Aaliyah is a 37-year-old account manager at a large pharmaceutical company. She earns $300,000 a year plus bonuses. She meets with Theo, an insurance agent, to review her life insurance needs. Theo deduces that Aaliyah needs a $250,000 universal life (UL) insurance policy. Aaliyah agrees but states that she wants to keep her premiums low. Which of the following UL death benefit options would BEST suit her needs?
Axel owns a $150,000 whole life insurance policy with an accumulated cash surrender value (CSV) of $20,000. His monthly premiums are $300, due on the fifth day of each month. Axel misses his November 5 premium payment and then dies a few weeks later, on November 20.
Kiril is the sole proprietor of a small gym with five employees. His sales manager, Antoine, is a former Olympic athlete, responsible for generating close to 50% of all revenues for the gym. Thanks to Antoine's popular social media presence, the gym is profitable and growing rapidly. However, Kiril has concerns about the future profitability of his gym should Antoine become ill or injured since the other employees are not local celebrities and would not be able to replace Antoine’s contribution to the business.
Which of the following types of insurance policy would protect the gym if Antoine were unable to work?
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?
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?
Vladimir is a new insurance agent with Family-Assure Inc. He and his supervisor Petros are reviewing the information collected during Vladimir's first meeting with Vanessa, a restaurant owner looking to add to her existing disability insurance (DI) coverage. Petros notices an overlap among sources, although the existing coverage appears adequate. Petros reminds Vladimir to explain to Vanessa how she would be impacted if she were to claim disability benefits.
What should Vladimir tell Vanessa?
Dorothy, age 36, is an architect. She runs her own office with the help of two assistants. She owns her own condo, has an active social life, and travels regularly for pleasure. She has a net annual income of approximately $125,000, once all the business, rent, salary, and car expenses have been paid. Dorothy is well aware of the significant financial problems that she would face for any absences from the office due to illness or disability. What are Dorothy’s main protection needs in this respect?
Monique meets with Tyra, an insurance agent, to review her insurance needs. Tyra explains the different types of policies and asks Monique for more information on her sources of income and expenses to properly evaluate her needs.
Which document should Tyra review to better understand Monique’s sources of income?
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?
Emery is a healthy wife and mother of two who spends her days caring for her children and volunteering at the local food bank. Emery would like to purchase disability insurance coverage because she is worried about how she would be able to take care of her family if she becomes disabled.
What type of disability policy, if any, is likely to be issued to her?
Larry, an insurance agent, meets with Ethan, a freelance photographer, to review his insurance needs. Larry tells Ethan that he wants to collect all pertinent financial information to prepare a net worth statement for Ethan.
Why does Larry want to prepare Ethan’s net worth statement?
Rene, age 39, is a framing carpenter at a company that builds doors and windows. He has group disability insurance equivalent to 60% of his annual salary, which is $70,000. His monthly living expenses are $3,500. Since he has no pension plan at work, Rene has enrolled in an individual RRSP through payroll deductions ($1,000 per month). His RRSP savings currently amount to $45,000. In addition, Rene has $10,000 in a non-registered savings account. What should Rene’s life insurance agent advise him?
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?
Patricia is a laboratory technician who normally earns $4,000 a month. A few months ago, she injured her leg rollerblading and was unable to work for four months. Since she owns a disability insurance policy with a residual benefit option, she received $2,400 a month from the insurer. Now that she is recovered, her doctor has cleared her to slowly return to work. Since she cannot work her regular full-time hours, her pay has decreased to $3,000 a month.
How much will she receive from her residual benefit when she returns to work?
Amani owns Amani's Passions, an eco-friendly cosmetics company she started in her garage three years ago. The business is booming—so much so that Amani's Passions recently hired over 20 employees to keep up with demand. Now Amani wants to set up a group insurance plan for her staff.
Whose role is it to solicit quotes from insurers and put the right plan in place?
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?
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?
Renato’s new employer has just informed him that he is now eligible to join the company’s group insurance plan. He could thus benefit from life, disability, and prescription drug coverage. Renato promptly fills out the paperwork to apply for the plan’s basic coverage. Wondering if the process will involve medical underwriting at any point, he asks an agent from the group insurance provider. What should the agent tell him?
Kalei owns a $250,000 life insurance policy with an accumulated cash surrender value of $75,000. She meets with her insurance agent Pamela to inform her that she quit her job last week. She wants to start an online business and needs $40,000 to fund the inventory and coverher living expenses for a few months. She heard that it was possible to obtain a loan using her policy at a 5% interest rate. Which of the following statements about collateral assignment is CORRECT?
Following the death of her sister Sarah last year, Yesha, the liquidator of Sarah's estate, had been in contact with Sarah’s insurance agent Monique on several occasions to claim the death benefit on Sarah’s life insurance policy.
Yesterday, Yesha noticed that Sarah also had a disability insurance policy with a return of premium option which stated that a portion of the premiums can be reimbursed upon her death. Yesha contacted Monique again and asked her for more details about the disability policy and return of premium option but Monique replied that she could not help her as her firm had destroyed Sarah's files shortly after paying out the death benefit.
Did Sarah’s firm act appropriately?
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?
Cecilia, a licensed life insurance agent, delivers a life insurance policy to her client Tony, a newly landed immigrant. Tony would like to pay the policy using the pre-authorized monthly payment method. However, he does not have a bank account in Canada yet and doubts he could find the time to open one in the next few days. Cecilia offers to open a savings account for him, but Tony is unsure whether she is licensed to do that. What should Cecilia tell Tony to reassure him that she can open a savings account on his behalf?
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?
Nine months ago, Osvaldo was instructed by his insurance agent, Jane, to write a cheque to renew his life insurance. Jane put the cheque in her wallet. She lost her wallet the very same day and completely forgot about Osvaldo’s payment. Some time later, Osvaldo died in a tragic car accident. His family made a claim for the death benefit, but was denied because the policy had lapsed. Who will have to compensate Osvaldo’s family for the loss of death benefit?
Callum is an agent with Neverland Insurance. It was recently discovered that he had been using a tied selling technique to double his sales with each client. Which one of the following organizations will take action against Callum’s conduct?
Xander fills out a life insurance application to purchase a $75,000 policy. The policy is accepted by the insurer and delivered to him on March 3. He pays the first month’s premium upon receipt of the policy. Unfortunately, on March 9, Xander loses his job and decides that he no longer wants the policy. What will be the consequence of this cancellation?
Harris is the father of Aden, Charlie, and Edmond. They are turning 29, 26, and 24 this year respectively. Harris purchased a life insurance policy with Aden as the life insured, Charlie as the successor owner, and Edmond as co-owner of the policy. He also named his wife, Becky, as the irrevocable beneficiary. Years have passed and the life insurance accumulated sufficient cash value. Harris is working out of town most of the time and none of the family members can get hold of him. One day, Harris encounters a car accident in another country and becomesunconscious. Becky and the children decide to cancel the policy and remit the cash value to Harris’s hospital. Which party can execute the intended transaction?
Samir applied for a life insurance policy 18 months ago. At the time of the application, he was employed as an accountant. Samir quit his accounting job 6 months ago to become a professional scuba diver.
Which of the following statements about Samir’s life insurance policy is CORRECT?
Sergei meets with his insurance agent Nikita to purchase a $50,000 critical illness policy. Nikita explains that to apply for the policy Sergei would have to answer a series of personal questions about his finances, health, and lifestyle. Sergei is uncomfortable giving Nikita such detailed personal information. Nikita reassures Sergei by telling him that the insurer must follow stringent rules about how they can collect and handle this information. Which organization legislates privacy statutes pertaining to insurance companies?
Cassie applies for a $100,000 renewable 10-year term insurance policy through Mason, her insurance of persons representative. A month later, when Mason meets with Cassie again to deliver her contract, Cassie says she had to have a biopsy the previous week for a persistent cough. Mason tells her not to worry because the policy is already accepted. He completes the policy delivery. Six months later, Mason receives a call from Cassie's boyfriend informing him that Cassie died of stage 4 throat cancer.
How will the insurance company handle the claim?
Danny purchases a $1,000,000 whole life insurance policy. He names his three daughters, Donna-Joe, Stephanie, and Michelle, as revocable beneficiaries with each receiving one-third of the death benefit.
If Michelle predeceases Danny, and Danny did not have a chance to modify his beneficiary designation, how will Danny’s death benefit be paid out?
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?
