LLQP IFSE-Institute Exam Questions and Free Practice Test

Question 55

- (Topic 2)
Last month, Suzanne purchased a life insurance policy from a local agent. The agent told her that the policy would accrue a cash value that she could draw from in her retirement years and that the premium would never increase. After recently meeting with a close friend, who is a retired insurance advisor, she was dismayed to learn that what was sold to her is in fact a term policy with no cash value. If Suzanne wishes to make a formal complaint against the agent, which authority can assist her in doing so?

A. Assuris.

B. OmbudService for Life and Health Insurance.

C. Canadian Council of Insurance Regulators.

D. Office of the Privacy Commissioner of Canada.

Correct Answer:B
Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:
The agent??s misrepresentation violates ethical standards. TheIFSE Ethics and Professional Practice Course (Common Law)identifies the OmbudService for Life and Health Insurance (OLHI) as an independent body that assists consumers with complaints against insurance agents or companies when internal resolution fails. Assuris (A) protects policyholders if an insurer fails, not for agent misconduct. The Canadian Council of Insurance Regulators (C) coordinates policy, not complaints. The Office of the Privacy Commissioner (D) handles privacy issues, not misrepresentation. OLHI is the correct avenue for Suzanne, making B correct.
References:
IFSE Ethics and Professional Practice Course (Common Law), Module 4: Regulatory Environment, Section on "OmbudService for Life and Health Insurance."

Question 56

- (Topic 2)
Laraine wants to purchase an Individual Variable Insurance Contract (IVIC) because of the death benefit guarantee as she has been ill. She has decided on a segregated fund which has, as its underlying asset, units of a mutual fund that invests in North American common shares. Her insurance agent, Jeffrey, wants her to understand key issues before she completes and signs the application. What should Jeffrey do?

A. Provide her with the prospectus issued for the underlying mutual fund units.

B. Provide her with the summary information folder for the segregated fund.

C. Tell her she has a 10-day "free look" to review the contract.

D. Tell her she must complete a medical questionnaire which will be attached to the application.

Correct Answer:B
Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:
An IVIC, such as a segregated fund, is an insurance product with investment components, and agents are required to ensure clients understand its features. TheIFSE Ethics and Professional Practice Course (Common Law)mandates that agents provide a summary information folder (or similar disclosure document) specific to the segregated fund, outlining its risks, benefits, and guarantees (like the death benefit). A prospectus (A) is for mutual funds, not segregated funds, which have distinct disclosure requirements. While a 10-day "free look" period (C) exists, it??s not the primary disclosure step before signing. A medical questionnaire (D) may be required but isn??t about understanding the product. Jeffrey??s duty is to ensure Laraine understands the segregated fund via the summary information folder, making B correct.
References:
IFSE Ethics and Professional Practice Course (Common Law), Module 5: Investment Products and Insurance, Section on "Segregated Funds Disclosure."

Question 57

- (Topic 3)
Vincent, aged 55, plans to retire 10 years from now after a 40-year career with the federal government. He will then receive a federal pension and will benefit from a retiree health plan. His wife Catherine is 15 years younger than him. Vincent also has an RRSP that he intends on using in part to fund his travel plans in retirement, and in part to leave a lump sum to Catherine for her living expenses after he dies. Vincent has planned his budget carefully and feels confident that he has thought of everything. What may Vincent??s insurance agent suggest he consider to safeguard his retirement?

A. Critical illness insurance to pay for unexpected medications.

B. Long-term care insurance to prevent depleting his RRSP due to a serious illness.

C. Extended health insurance to pay for an unexpected hospital stay.

D. Disability insurance to replace his income for injuries lasting longer than 90 days.

Correct Answer:B
Comprehensive and Detailed Explanation:
Vincent??s pension and health plan cover income and basic health needs. LTC insurance protects his RRSP from depletion due to care costs, ensuring funds for travel and Catherine??s inheritance (Chapter 4:Insurance to Protect Savings).
Option A: Unnecessary; retiree health likely covers medications. Option B: Correct; LTC preserves savings.
Option C: Redundant; retiree plan covers hospital stays. Option D: Irrelevant; he??s retiring, not working.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 4:Insurance to Protect Savings.

Question 58

- (Topic 1)
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.

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.

Correct Answer:D
Accidental Death and Dismemberment (AD&D) riders typically exclude coverage if the injury ordeath occurs while engaging in criminal activities or illegal acts. Since Francis was injured while breaking into his brother??s house, his actions are considered illegal, and this would void any claim under the AD&D rider. As a result,Francis will not receive any benefitdue to the circumstances surrounding the injury.

Question 59

- (Topic 4)
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?

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.

Correct Answer:B
Under the rules governing Locked-In Retirement Accounts (LIRAs) in Canada, which apply similarly across provinces including Ontario, there are specific circumstances under which a person may access funds prior to the usual retirement age. In general, LIRA funds are intended to be kept locked-in until a specified retirement age. However, early withdrawal is permitted if the account holder becomes disabled and has a reduced life expectancy, as stated in LLQP materials. Thus, Nathalie??s disability and reduced life expectancy would qualify her to withdraw from the LIRA. Moving to another location, retiring, or collecting QPP benefits do not generally permit early withdrawal from a LIRA.
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Question 60

- (Topic 4)
Claudie??s mother has been the policyholder and beneficiary of an insurance policy on the life of Claudie since she was five years of age. Claudie is now the mother of a three-month- old boy. Claudie would like for Marc-Andr??, her de facto spouse, to be the beneficiary of the policy. What steps need to be taken in order for this to happen?

A. As the policyholder, Claudie??s mother must make a written request for a change of beneficiary and designate Marc-Andr??

B. As the beneficiary, Claudie??s mother must make a written request for a change of beneficiary and designate Marc-Andr??

C. As the insured, Claudie must make a written request for a change of beneficiary and designateMarc-Andr??

D. As the insured, Claudie must make a written request for a change of policyholder and designate Marc-Andr??

Correct Answer:A
Comprehensive and Detailed In-Depth Explanation: In life insurance, the policyholder owns the contract and has the authority to change the beneficiary, per the Civil Code of Quebec (Article 2425). Claudie??s mother, as the policyholder, must submit a written request to the insurer to designate Marc-Andr?? as the new beneficiary, making option A correct. Option B is incorrect because the beneficiary (Claudie??s mother) has no control over changing the designation—only the policyholder does. Option C is wrong, as the insured (Claudie) has no inherent right to alter the beneficiary unless she is also the policyholder, which she is not. Option D misstates the goal—Claudie wants a beneficiary change, not a policyholder change. The Ethics and Professional Practice manual stresses that advisors must ensure clients understand policy ownership rights and procedures for beneficiary changes.
References: Civil Code of Quebec, Article 2425; Ethics and Professional Practice (Civil Law) Manual, Section on Policy Ownership and Beneficiary Designations.

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