LLQP Exam Preparation Manual Guide
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Questions and Answers

What is the primary purpose of the LLQP Exam Preparation Manual?

  • To offer financial advice to the general public.
  • To help candidates develop the competency to recommend life insurance products. (correct)
  • To serve as a legal reference for life insurance regulations.
  • To provide a comprehensive history of life insurance products.

According to the foreword, how should candidates use the competency components and sub-components of the LLQP Curriculum while studying?

  • Memorize them without understanding their application.
  • Use them only after completing all chapters of the manual.
  • Ignore them, focusing instead on the chapter summaries.
  • Regularly review them to contextualize and assimilate the chapter contents. (correct)

What does the highlighting of evaluation objectives in each chapter of the manual serve to identify?

  • The sections of the manual that are least important for exam preparation.
  • The contents that are essential to attain the objectives. (correct)
  • The areas where candidates should seek external consultation.
  • The historical development of life insurance regulations.

Who holds the copyright for the Life Licence Qualification Program Exam Preparation Manual?

<p>Autorité des marchés financiers. (C)</p> Signup and view all the answers

What explicit restriction is placed on the use of the LLQP Exam Preparation Manual's content?

<p>No part of it may be reproduced without written permission from the Autorité des marchés financiers. (B)</p> Signup and view all the answers

Besides Susan Yates, Roxanne Eszes, and the Autorité des marchés financiers, who else was directly involved in production of the manual?

<p>Sandra Ciccocioppo. (A)</p> Signup and view all the answers

Which statement is most accurate regarding the manual's adaptation into French?

<p>A committee, including Me Jacqueline Bissonnette, contributed to the French adaptation. (B)</p> Signup and view all the answers

What is the ISBN of the LLQP Exam Preparation Manual?

<p>978-2-551-27158-0 (D)</p> Signup and view all the answers

Which of the following best represents the initial step in assisting a client according to the 'Competency sub-component'?

<p>Identifying and clearly defining the potential risks that could negatively impact the client's financial well-being. (A)</p> Signup and view all the answers

What is a significant reason why individuals postpone purchasing life insurance?

<p>They are unwilling to confront the concept of their own mortality. (A)</p> Signup and view all the answers

What is meant by the term 'mortality rate' in the context of insurance?

<p>The probability of dying at a specific age. (D)</p> Signup and view all the answers

Which factor does not directly influence a person's mortality risk, as considered by life insurance companies?

<p>Geographic location (B)</p> Signup and view all the answers

Life insurance companies categorize individuals into groups based on their risk profiles. What is the primary purpose of this categorization?

<p>To estimate an individual's risk of death based on historical mortality data for similar groups. (B)</p> Signup and view all the answers

How do life expectancy and probability of death relate to one another?

<p>Life expectancy is the average time a person is expected to live and probability of death is the likelihood of dying at a particular age, both are ways of assessing the risk of death. (D)</p> Signup and view all the answers

Why is understanding mortality rates important when structuring a client's financial plan, especially concerning life insurance?

<p>Understanding mortality rates can help choose the most appropriate life insurance, coverage amount, and premium payment structure. (C)</p> Signup and view all the answers

An individual who has avoided income taxes their entire life dies. Why might this person still benefit from having life insurance?

<p>Estate taxes and other end-of-life expenses can still impact their estate and beneficiaries. (C)</p> Signup and view all the answers

Which of the following factors would have the LEAST impact on life insurance premiums?

<p>The chief operating officer (COO) of the insurance company. (B)</p> Signup and view all the answers

Which of the following is NOT a standard abbreviation used in the life insurance industry?

<p>EFT (A)</p> Signup and view all the answers

What does the acronym 'LIRD' stand for in the context of life insurance?

<p>Life Insurance Replacement Declaration (B)</p> Signup and view all the answers

Which of the following would generally NOT be considered when assessing a client's need for life insurance?

<p>The insured's favorite color. (C)</p> Signup and view all the answers

What is the significance of the 'Adjusted Cost Basis' (ACB) in life insurance?

<p>It is used to calculate the taxable portion of policy proceeds. (A)</p> Signup and view all the answers

Which of the following combinations of factors would generally result in the HIGHEST life insurance premium, assuming all other factors are equal?

<p>Older age, female, poor health. (D)</p> Signup and view all the answers

Which of the following terms describes a policy where the cost of insurance (COI) remains the same throughout the policy's duration?

<p>Level Cost of Insurance (LCOI) (D)</p> Signup and view all the answers

What is the main purpose of the 'Maximum Tax Actuarial Reserve' (MTAR)?

<p>To set the maximum amount an insurance company can claim as a reserve for tax purposes. (A)</p> Signup and view all the answers

Which of the following benefits is designed to allow the insured to purchase additional insurance coverage at specified future dates without providing evidence of insurability?

<p>Guaranteed Insurability Benefit (GIB) (A)</p> Signup and view all the answers

What is the main difference between 'Participating' (Par) and 'Non-Participating' (Non-Par) life insurance policies?

<p>Par policies may pay dividends to policyholders, while Non-Par policies do not. (C)</p> Signup and view all the answers

What is the primary purpose of the 'exempt test' in the context of life insurance policies?

<p>To establish whether a life insurance policy is considered primarily for insurance or investment purposes under tax regulations. (A)</p> Signup and view all the answers

What is the consequence if a life insurance policy becomes 'non-exempt'?

<p>The policy is subject to a deemed disposition and annual accrual rules for tax purposes. (A)</p> Signup and view all the answers

Which of the following actions can be taken to remedy a life insurance policy that exceeds the Maximum Tax Actuarial Reserve (MTAR)?

<p>Withdrawing premiums from the policy. (B)</p> Signup and view all the answers

What is the primary purpose of the 'anti-dump-in rule' concerning life insurance policies?

<p>To prevent policyholders from overfunding a policy in a short period to gain undue tax advantages. (B)</p> Signup and view all the answers

In the context of life insurance, what does 'deemed disposition' refer to when a policy becomes non-exempt?

<p>A tax rule that treats the policy as if it has been sold, triggering potential tax liabilities. (C)</p> Signup and view all the answers

What is a potential advantage of retaining an older life insurance policy when considering a replacement?

<p>Older policies may have more favorable tax rules or guarantees compared to newer policies. (A)</p> Signup and view all the answers

What happens when a life insurance policy is absolutely assigned to a non-arm’s length party?

<p>There may be tax implications based on the fair market value of the policy at the time of assignment. (B)</p> Signup and view all the answers

Under what circumstances might a policyholder choose to 'opt-out' of the spousal rollover when assigning a life insurance policy to their spouse?

<p>When the policyholder wants to trigger a taxable event immediately, potentially to utilize available tax credits or losses. (C)</p> Signup and view all the answers

In the context of assigning a life insurance policy to a child, what is a key requirement for a direct transfer to qualify for certain tax treatments?

<p>The transfer must be made directly to the child, without any intervening trusts or entities. (B)</p> Signup and view all the answers

What is the primary advantage of a spousal rollover upon the death of a policyholder?

<p>It defers taxes until the death of the surviving spouse or when the policy is disposed of. (D)</p> Signup and view all the answers

How does using a life insurance policy as collateral for a loan impact the deductibility of premiums?

<p>Premiums become non-deductible unless the borrowing is for business use and specific conditions are met. (D)</p> Signup and view all the answers

Under what circumstance might annuitizing the cash surrender value (CSV) of a life insurance policy be particularly beneficial?

<p>When the policyholder is disabled and needs a stream of income. (A)</p> Signup and view all the answers

When leveraging a life insurance policy, what is a typical method of collateralizing the cash surrender value (CSV)?

<p>Assigning the policy to a lender as security for a loan. (B)</p> Signup and view all the answers

What is a key tax benefit associated with assigning a new life insurance policy to a charity?

<p>The policyholder receives a Charitable Donation Tax Credit for the premiums paid. (D)</p> Signup and view all the answers

What is a potential impact of the death of a key person on a business?

<p>Loss of skills, knowledge, and relationships critical to the business's operation. (C)</p> Signup and view all the answers

Which of the following is NOT a typical dividend payment option for a participating whole life insurance policy?

<p>Increased face value of the policy (A)</p> Signup and view all the answers

How do surrender charges typically impact the cash surrender value (CSV) of a whole life insurance policy?

<p>They reduce the CSV, especially in the early years of the policy. (A)</p> Signup and view all the answers

What is the primary purpose of 'non-forfeiture options' in a whole life insurance policy?

<p>To prevent the policyholder from forfeiting the policy's cash value if they can no longer pay premiums. (B)</p> Signup and view all the answers

Which non-forfeiture option uses the policy's cash value to purchase term insurance for the full face amount of the original policy?

<p>Extended term insurance (A)</p> Signup and view all the answers

What is a key characteristic of a 'limited payment whole life' insurance policy?

<p>Premiums are paid for a limited time, after which the policy is fully paid up. (C)</p> Signup and view all the answers

What is the primary goal of a 'premium offset' policy?

<p>To use policy dividends to cover premium payments, potentially eliminating the need for out-of-pocket payments. (C)</p> Signup and view all the answers

Which of the following is a potential disadvantage of whole life insurance compared to term life insurance?

<p>Whole life insurance policies may have lower returns compared to other investment options. (A)</p> Signup and view all the answers

How might a whole life insurance policy be used in estate planning?

<p>To provide liquidity to pay estate taxes. (A)</p> Signup and view all the answers

What happens to a Term-100 (T-100) life insurance policy when the insured individual reaches the age of 100?

<p>The policy matures, and the face value is paid out to the policy owner. (D)</p> Signup and view all the answers

What does 'unbundling' refer to in the context of universal life insurance policies?

<p>Separating the policy into its core components: cost of insurance, expenses, and investment. (C)</p> Signup and view all the answers

How does the flexibility of premium payments in a universal life insurance policy benefit the policyholder?

<p>It allows the policyholder to adjust the timing and amount of premiums within certain limits. (A)</p> Signup and view all the answers

What factor determines the 'net amount at risk' (NAAR) in a universal life insurance policy?

<p>The difference between the policy's face amount and the policy's cash value. (D)</p> Signup and view all the answers

What distinguishes Yearly Renewable Term (YRT) from Level Cost of Insurance (LCOI) within a Universal Life policy?

<p>YRT's premium escalates each year as the insured ages, whereas LCOI averages costs over a period, offering consistent premiums. (A)</p> Signup and view all the answers

In the context of Universal Life insurance, which of the following statements accurately describes the impact of increasing the policy's face amount?

<p>It increases the net amount at risk (NAAR), potentially raising the COI. (C)</p> Signup and view all the answers

A policyholder with a Universal Life policy opts for a Level Cost of Insurance (LCOI) instead of a Yearly Renewable Term (YRT) structure. What potential benefit can they expect from this choice regarding their policy's performance over time?

<p>Higher initial premiums but potentially lower premiums in later years, along with more predictable costs. (D)</p> Signup and view all the answers

Which of the following is NOT a typical advantage provided by a buy-sell agreement?

<p>Elimination of all potential disputes among remaining owners. (A)</p> Signup and view all the answers

What is the main purpose of 'key person' life insurance?

<p>To protect a business against the financial loss resulting from the death or disability of a vital employee. (B)</p> Signup and view all the answers

In a cross-purchase buy-sell agreement funded by life insurance, who owns the policies on the lives of the other owners?

<p>Each owner owns policies on the lives of the other owners. (A)</p> Signup and view all the answers

What is the primary function of the Capital Dividend Account (CDA) in the context of business-owned life insurance?

<p>To allow the tax-free distribution of life insurance proceeds to shareholders. (A)</p> Signup and view all the answers

What is the purpose of a Temporary Insurance Agreement (TIA)?

<p>Provides temporary life insurance coverage while the full policy is being underwritten. (A)</p> Signup and view all the answers

Which of the following is NOT a typical factor considered during the underwriting process?

<p>The beneficiary's credit score. (A)</p> Signup and view all the answers

What is the role of the Medical Information Bureau (MIB) in the life insurance application process?

<p>To collect and share medical information among member insurance companies to detect fraud and misrepresentation. (A)</p> Signup and view all the answers

What is 'post-claim underwriting' primarily associated with?

<p>Group life insurance policies, particularly creditor life insurance. (C)</p> Signup and view all the answers

Which of the following best describes 'insurable interest' in the context of a life insurance application?

<p>A legitimate relationship between the applicant and the insured where the applicant would suffer a financial loss upon the death of the insured. (D)</p> Signup and view all the answers

What is the potential consequence of fraudulent misrepresentation on a life insurance application?

<p>The policy may be voided by the insurer, and the death benefit may not be paid. (B)</p> Signup and view all the answers

How does reinsurance affect an insurance company?

<p>It enables the company to transfer a portion of its risk to another insurer. (A)</p> Signup and view all the answers

What is the significance of the 'agent's comments' section on a life insurance application?

<p>It provides space for the agent to clarify any unusual or potentially problematic information revealed in the application. (D)</p> Signup and view all the answers

Which of the following factors primarily influences mortality costs for a life insurance company?

<p>The expected number of deaths among the insured population. (A)</p> Signup and view all the answers

What is the implication of being classified as a 'rated risk' during life insurance underwriting?

<p>The applicant presents a higher-than-average risk, leading to higher premiums or policy exclusions. (A)</p> Signup and view all the answers

Which document is most likely to be requested by an underwriter to obtain detailed information about an applicant's medical history?

<p>Attending Physician's Statement (APS) (A)</p> Signup and view all the answers

Flashcards

LLQP

A program for future life insurance agents.

LLQP Life Insurance Module Competency Target

To recommend individual and group life insurance products tailored to a client's needs.

Chapter Overview Page

Outlines the Curriculum module competency components and sub-components that will be covered in the Chapter.

Recommended Action for Candidates

Regularly reviewing the competency components and sub-components.

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Purpose of Reviewing Competency Components

To contextualize and assimilate the materials of individual and group life insurance products adapted to the client’s needs and situation

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Purpose of this manual

An exam preparation tool for future life insurance agents registered in the Life License Qualification Program (LLQP)

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Serve of Chapter Overview Page

Highlighting which of the evaluation objectives are addressed in each of the manual’s Chapters

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Contents highlighted in Chapters

Identify the contents that are essential to attain these objectives.

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Individual Life Insurance

Insurance purchased on an individual, covering their life.

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Adjusted Cost Basis (ACB)

The original cost of an asset, plus capital improvements, minus depreciation or other deductions.

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Maximum Tax Actuarial Reserve (MTAR)

Maximum amount of policy reserve.

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Accidental Death (AD)

Extra benefit paid out, in addition to the life insurance benefit, when the insured dies in an accident.

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Accidental Death and Dismemberment (AD&D)

Extra benefit paid out, in addition to the life insurance benefit, when the insured suffers from an accident resulting in dismemberment.

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Automatic Premium Loans (APL)

A loan automatically taken from the cash value of a life insurance policy to cover unpaid premiums.

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Attending Physician’s Statement (APS)

A statement from the insured's doctor regarding their medical history and current health status.

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Canadian-Controlled Private Corporations (CCPC)

A corporation that meets certain criteria and is eligible for preferential tax treatment in Canada.

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Capital Dividend Account (CDA)

Account used by private corporations to track tax-free dividends that can be paid to shareholders.

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Cash Surrender Value (CSV)

The amount of money the insurance company will pay if the policyholder cancels their permanent life insurance policy.

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"Key person" life insurance

Life insurance purchased by a corporation on the life of a key employee.

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Split-dollar arrangements

An arrangement where the premium cost is split between two parties, usually an employer and an employee

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Buy-sell agreements

An agreement outlining what happens when a business owner wants to leave or dies.

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Cross-purchase agreements

Each owner insures the lives of the other owners.

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Guaranteed buyer

Guarantees a buyer for the business interest.

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Guaranteed value

Guarantees a fair price for the business interest.

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Mandatory sale

Requires the sale of the business interest upon the occurrence of a specific event.

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Guaranteed funding through life insurance

Life insurance ensures that funds are available when a buy-sell event happens.

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Criss-cross insurance

A type of cross-purchase agreement funded by life insurance.

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Business-owned insurance

The corporation owns and is the beneficiary of the life insurance policies on the owners.

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Temporary insurance agreement (TIA)

An initial agreement providing temporary coverage while the full policy is being underwritten.

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Application

A formal request to an insurance company for coverage.

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Underwriting

The process of assessing risk and determining policy terms.

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Participating Whole Life Policies

Life insurance policies where the policyholder may receive dividends based on the insurance company's performance.

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Shortfalls or Surpluses in Policies

A situation where the actual performance of the insurance company differs from what was initially projected, which causes the dividend paid out to vary.

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Non-Participating Policies

Life insurance policies that do not pay dividends to the policyholder.

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Dividend Payment Options

Options for receiving dividends from a participating life insurance policy, such as cash, premium reduction, or paid-up additions.

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Premium Reduction (Dividends)

Using dividends to decrease your premium payments.

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Dividend Accumulation

Leaving dividends with the insurance company to accumulate interest.

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Paid-Up Additions (PUA)

Buying additional life insurance coverage with your dividends.

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Non-Forfeiture Benefits

Provisions in a life insurance policy that protect the policyholder from losing all benefits if the policy lapses due to non-payment.

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Surrender Charges

Fees charged by the insurance company when a policy is surrendered early.

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Reduced Paid-Up Insurance

Using the policy's cash value to purchase a reduced amount of paid-up insurance.

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Extended Term Insurance

Using the policy's cash value to purchase term insurance for the original face amount.

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Limited Payment Whole Life

A whole life policy where premiums are paid for a specified number of years, after which no further premiums are required.

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Risk of Death

The risk that everyone faces, regardless of age or other factors.

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Mortality Rate

The probability of dying at a specific age.

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Factors Influencing the Mortality Rate

Age, gender, family history, health, and lifestyle choices.

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Risk Classification

Grouping people with similar risk profiles for insurance purposes.

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Risk Estimation

Estimating an individual's risk of death based on mortality data from a similar risk group.

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Life Expectancy

The average number of years a person is expected to live from a certain age.

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Life Expectancy

One way of thinking about the risk of death is the average time a person may survive.

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Probability of death

One way of thinking about the risk of death is at which point the chances of you dying become higher.

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Non-Exempt Policy

When a life insurance policy no longer meets the requirements to be considered an exempt policy under the Income Tax Act.

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Exempt Test Purpose

A calculation to determine if a life insurance policy is primarily insurance or an investment, affecting its tax status.

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Increasing the Face Amount

Adjusting the death benefit amount to help a life insurance policy meet the requirements for tax exemption.

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Withdrawing Premiums

Reducing premium payments to help a life insurance policy maintain its tax-exempt status.

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Anti-dump-in Rule

Provision preventing large premium deposits intended to maximize the investment portion of a life insurance policy shortly before it's purchased.

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Deemed Disposition

A tax event that occurs when a life insurance policy becomes non-exempt, triggering tax on the policy's accumulated gains.

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Absolute Assignment

Transferring all rights and ownership of a life insurance policy to another party.

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General Assignment Rule

The general rule is that an absolute assignment of a life insurance policy is usually a disposition at fair market value for tax purposes unless it qualifies for a rollover.

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Assignment to Non-Arm’s Length

Special rules apply when assigning a life insurance policy to a non-arm’s length party which usually involves a disposition at fair market value for tax purposes.

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Assigning a Policy to a Spouse

Transferring a life insurance policy to a spouse without triggering immediate tax consequences.

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Rollover to Spouse

Occurs when a life insurance policy's ownership transfers to a surviving spouse, avoiding immediate taxation.

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Policy as Collateral

Using a life insurance policy as security for a loan.

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Annuitizing the Cash Surrender Value (CSV)

Withdrawing the cash value from a life insurance policy and using it to purchase an annuity.

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Business Life Insurance

Funding for a buy-sell agreement that will allow the remaining business owners to aquire the share from the deceased owner.

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Study Notes

  • This manual is an exam preparation tool for future life insurance agents in the Life License Qualification Program (LLQP).
  • The manual helps candidates develop competency in recommending individual and group life insurance products tailored to a client's needs and situation.
  • Each chapter outlines the Curriculum module competency components and sub-components covered.
  • Regularly review the competency components and subcomponents to contextualize and assimilate the information while reading each chapter.

Participating Whole Life Policies

  • Participating whole life policies are discussed in the manual

Dividend Payment Options for Participating Policies

  • Dividend payment options for participating policies are listed in the manual

Non-Forfeiture Benefits

  • Non-forfeiture benefits are found in the manual

Limited Payment Whole Life

  • Limited payment whole life policies are listed in the manual

Premium Offset Policies

  • Premium offset policies are fully explained

Advantages and Disadvantages of Whole Life Insurance

  • The advantages and disadvantages of whole life insurance policies are compared

Comparing Term and Whole Life Insurance

  • The text compares the benefits of term to whole life insurance

Using Whole Life Insurance

  • The best usage of whole life insurance is explained in detail

Term-100 (T-100) Life Insurance

  • The specific of Term-100 life insurance are explained

Universal Life Insurance

  • Universal life insurance is another topic discussed in the manual

Transparency Through Unbundling

  • The transparency through unbundling is discussed in the manual

Flexibility for the Policyholder

  • The flexibility for the policyholder is addressed

Pricing the Insurance Component

  • Pricing the insurance component is discussed in the manual

Guaranteed vs. Non-Exempt Policies

  • Guaranteed vs non-exempt policies are examined

Maximum Tax Actuarial Reserve (MTAR) Rule

  • Maximum Tax Actuarial Reserve (MTAR) rules are included

Maximum Tax Actuarial Reserve (MTAR) Remedies

  • Maximum Tax Actuarial Reserve (MTAR) remedies are included in the text

Anti-Dump-In Rule

  • The anti-dump-in rule is explained

Policy Becomes Non-Exempt

  • The course of action if a policy becomes non-exempt is listed

Tax Implications of Replacing an Existing Policy

  • Tax implications of replacing an existing policy are explained

Absolute Assignments

  • Absolute assignments are addressed in this manual

Death of the Policyholder

  • Procedures for the death of a policyholder are outlined

Taxation of Life Insurance Strategies

  • Taxation of life insurance strategies are discussed

Using the Policy as Collateral

  • Using a policy as collateral is an option

Annuitizing the Cash Surrender Value (CSV)

  • Options are available for annuitizing the cash surrender value

Leveraging a Life Insurance Policy

  • Ways to leverage a life insurance policy are examined in the manual

Charitable Giving

  • Policy usage for charitable giving is explored

Potential Impacts of Death on a Business

  • Potential impacts of death on a business are evaluated

Business Types

  • Business types are listed to show impacts of death

Key Person Life Insurance

  • Key person life insurance is looked at in detail in the manual

Split-Dollar Arrangements

  • Split-dollar arrangements are addressed in the manual

Buy-Sell Agreements

  • Buy-sell agreements are fully explained in the manual

Process Overview

  • Processing policies is outlined in the manual

Agent’s Role

  • The agent's role is described

Completing the Application

  • Completing life insurance applications is described

Underwriting

  • Underwriting policies is fully explained

Issuing and Delivering the Policy

  • What to do when issuing and delivering the policy

Application

  • Applications are discussed

Policy Details

  • Policy details are reviewed

About the Applicant

  • Information about the application is reviewed

About the Life Insured

  • Relevant information about the life insured is reviewed

Incomplete or Erroneous Information

  • Procedures for incomplete or erroneous information on applications are documented

Agent’s Comments

  • Areas regarding Agent’s commenrs are discussed

Temporary Insurance Agreement (TIA)

  • Temporary Insurance Agreements are examined

Requirements for Coverage

  • What is required for coverage is listed

Coverage Limits

  • Coverage limits are listed in the manual

Coverage Duration

  • Policy coverage durations are examined

Agent’s Responsibilities

  • Items covering agent's responsibilities are listed

Underwriting by the Insurance Company

  • Underwriting practices by the insurance company are addressed

Underwriting Guidelines

  • Underwriting guidelines are looked at

Attending Physician’s Statement (APS)

  • The importance of the Attending Physician’s Statement is examined

Medical Exam

  • When medical exams are required is fully explained

Medical Information Bureau (MIB)

  • The function of the Medical Information Bureau (MIB) is discussed

Motor Vehicle Record (MVR)

  • The importance of the Motor Vehicle Record (MVR) is discussed

Inspection Report

  • Inspection reports and their use cases are examined

Requests for Clarification or More Information

  • When and how to request clarification or more information is outlined

Financial Underwriting

  • The need for financial underwriting is highlighed

People Who Are Not Canadian Citizens

  • Rules for people who are not Canadian citizens are fully examined

Permanent Residents

  • Insurance coverage for permanent residents is addressed

Awaiting Permanent Residency

  • Insurance coverage while awaiting permanent residency is addressed

International Students

  • Can international students gain insurance coverage?

Frequent Travellers

  • How insurance covers frequent travellers is addressed

Avocations

  • The impact of certain Avocations is discussed

Accelerated Underwriting

  • What accelerated underwriting means for policies

Risk Classes and Their Impact on Premiums

  • How risk classes affect insurance premiums is addressed

Standard Risk

  • The standard risk class is fully explained

Preferred Risk

  • The preferred risk class is detailed

Rated Risk

  • How rated risk can affect the risk pool is detailed

Exclusions

  • Exclusions are addressed

Upgrading Risk Class

  • Can you upgrade your risk class?

Declined

  • What happens when your application is declined

Client Factors That May Affect Premiums

  • Impacts on premiums due to client factors

Age

  • How age influences premiums is discussed

Attained Age

  • The effect of attained age on premiums can be significant

Gender

  • How gender influences premiums is discussed

Health Status or Risk Class

  • How health status influences premiums is discussed

Hazardous Occupation

  • Those with hazardous occupations have to take that into account with a policy

Hazardous Lifestyle

  • A hazardous lifestyle can influence premiums

Company Factors That May Affect Premiums

  • How company factors affect premiums

Mortality Costs

  • Mortality costs have to be factored into premiums

Administration Costs and Expenses

  • Administration costs and expenses are factored into premiums

Investment Returns

  • Investment returns affect premiums

Reinsurance

  • Reinsurance is discussed

Issuing the Policy

  • Procedures for issuing policies are discussed

Delivery

  • Policy delivery process is fully explained

Acceptance

  • How to get acceptance on a policy

Group Life Insurance

  • How group life insurance works

Basic Group Life Insurance

  • How basic group life insurance works

Additional Coverage

  • What additional coverage means for group life insurance

Creditor Life Insurance

  • How creditor life insurance works

Post-Claim Underwriting

  • Post-claim underwriting is discussed

Assess the Family Dynamics

  • Assessing the family dynamics in relation to insurance is discussed

Current Spouse

  • How a current spouse may be affected is discussed

Risk of Death

  • Everyone faces the risk of death.
  • People often delay buying life insurance because they don't want to think about death stating it is too far away in the future to worry about.
  • Everyone is constantly exposed to this risk.
  • In insurance, the probability of dying at a specific age = mortality rate.
  • Factors influencing the risk of death include: age, gender, family history, health, smoking status, job, and income level.
  • Life insurance companies categorize people into groups with similar risk profiles using historical mortality data to estimate individual risk.
  • The risk of death can be viewed through life expectancy and probability of death.
  • Life expectancy is the average number of years a person in a certain group/age can expect to live.

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Description

This guide summarizes key aspects of the LLQP Exam Preparation Manual: its purpose, usage of competency components, highlighting of objectives, copyright, usage restrictions, contributors, adaptation into French, and ISBN.

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