LLQP Final Exam Ques PDF

MOCK EXAM
Question 1.) Dr. Jones is a cardiologist. He had a minor heart attack in his early 30
s and had a
complete recovery. He watches his health very carefully and has not had a single sign of
recurrence in almost 18 years. You start to complete the application and he tells you in passing
that he had a minor heart problem almost 20 years ago. He says it is not worth mentioning.
Which of the following is NOT AN APPROPRIATE course of action?
A ) You explain the importance of full disclosure while completing the application.
B ) You review the Medical Information Bureau notice with Dr. Jones and explain that his
medical history may show up in their report.
C ) You discuss the incontestability period and continue completing the application, ignoring his
past medical history of heart problems.
D ) You explain the possibility of a rating and how extra health ratings work.
Question 2.) Sally Jensen had asked you to meet with her because she has heard that she
should be setting up a RRSP. While Meeting with her, you explain that a RRSP has the
following advantages:
A ) Allows deferment of income tax to years when the plan holder is usually in a lower tax
bracket.
B ) Allows for all income and gains made within the plan to be tax sheltered.
C ) Allows for an opportunity to split retirement income (using both the contributor and the
spousal Registered Retirement Savings Plan)
D ) A, B, and C.
Question 3.) Joy is trying to decide what she should do with the $25000 inherence that she has
received from her grandmother
s estate. She is single and considering going back to school. She
hasn
t made a final decision about school yet but does not want to leave this money sitting in a
savings account in the bank. She is considering a guaranteed investment certificate issued by a
bank or a deferred annuity contract issued by a life insurance company.
Which of the following statement(s) is/are MOST CORRECT?
A ) A deferred annuity contract would not allow Joy to do an early withdrawal.
B ) A deferred annuity contract would allow Joy to do an early withdrawal with a penalty.
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C ) A guaranteed investment certificate would allow Joy to do an early withdrawal without a

penalty
D ) None of the above
Question 4.) Isabella Duncan is single. Her benefits plan provides dental coverage for basic
preventative and minor restorative care at 90% co-insurance and a $50 deductible with an overall
maximum of $1000 per year. She has made no other claims for herself yet this year. She was
surprised to learn from her dentist that severe neglect had led to damage to her teeth, which cost
$1200 to repair.
The amount her employer
s insurance company would reimburse her would be:
A ) $1500
B ) $1080
C ) $1000
D ) $115
Question 5.) Paula Simpson has been a member of the Albright Manufacturing firm groupbenefit plan for 10 years. She is a non-smoker who is in excellent health. Her employment
with this firm will be terminated in 14 days. Which of the following statement(s) is/are
TRUE?
A ) The cost of converting her group insurance will always be lower than the cost of purchasing a
medically underwritten individual policy.
B ) She has 15 days from her termination date to convert her group life insurance.
C ) Some companies will allow the conversion of group long-term disability to an individual
policy
D ) She has 45 days from her termination date to convert her group life insurance.
Question 6.) Ali Singh was born on January 5th, 1958. His wife Janaki was born in December
1955. They work for different employers. Ali
s benefits plan provides Basic Dental Care at 90%
co-insurance, with no deductible, and an overall maximum of $1000/yr per person. Janaki
s
benefits plan provides Basic Dental Care coverage with 100% co-insurance, no deductible, no
overall maximum and 50% co-insurance for major Restorative with a maximum of $1000/yr per
person. They have both selected family coverage, with their respective employers. Ali had basic
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dental services performed for $500 and had a partial denture plate made, which cost $500.
Which of the following answers correctly reflects how the insurers would coordinate their
payments for Ali
s dental claim?
A ) Ali
s plan would pay for the entire $1000 claim minus the co-insurance amount
B ) Ali
s plan would pay $500 for the basic dental minus the co-insurance amount
C ) Janaki
s plan would pay for 50% of the $500 Major Restorative portion, plus the 10% from
the co-insurance that Ali
s company did not pay
D ) B and C
Question 7.) Marie and Joe Falcon retired last year when Joe turned 65 and Marie turned 60 after
contributing to their Registered Retirement Savings Plans for 30 years. They currently receive
Canada Pension Plan and Joe
s Old Age Security benefits but a large portion of the Old Age
Security is taxed. They sold the family home and moved to their retirement home. They have not
drawn on their Registered Retirement Savings Plans savings, using other savings, proceeds from
selling their home and income from other non-tax-sheltered investments. They have almost
$500,000 saved in self-directed Registered Retirement Savings Plans, $300,000 in Joe
s name
and $200,000 in a spousal plan. They would like to draw a minimum amount of these funds to
live on and provide an estate for their children. Without any grand plans or desire to continue
working part time, they established the following objectives. During our retirement years, we
would like to: Preserve our Registered Retirement Savings Plans capital by taking the minimum
withdrawal required and by drawing on income from other investments plus Canada Pension
Plan and Old Age Security benefits; maintain our standard of living at $40,000; provide our
children with an inheritance.
When they each reach age 71, what would you recommend in order for them to maintain
their objectives?
A ) Purchase a single premium immediate annuity
B ) Monitoring progress of assets
C ) Converting each Registered Retirement Savings Plan to a Registered Retirement Income
Fund
D) A& B
Question 8.) Kathy age 59 and Brett age 71 are married. They have each been contributing to a
Registered Retirement Savings Plan for many years.
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Which of the following statement/s are TRUE?

A ) Withdrawal amounts from a Registered Retirement Savings Plan cannot change once they
commenced.
B ) The maximum amount that Brett can take from his Registered Retirement Income Fund
withdrawals must be based on Brett
s age.
C ) The minimum withdrawal amount that Brett must take from his Registered Retirement
Income Fund can be based on Kathy
s age.
D ) Once Brett commences his withdrawals from his Registered Retirement Income Fund, Kathy
must transfer her Registered Retirement Savings Plan to a Registered Retirement Income Fund.
Question 9.) Barry and Janet Avery are a married couple who have just bought their first home.
Barry is 29 and a non-smoker. Janet is 26 and a non-smoker. They need to purchase a $185,000
10 year renewable and convertible term insurance policy to cover the balance of the mortgage on
their new home. They have decided to purchase 2 individual policies. The rates per thousand for
Barry are $1.24 and the rate for Janet is $1.19. The policy fee is $50 on each policy. The Avery
s
wish to pay the premium on a preauthorized chequing basis. The factor for them to pay using
preauthorized chequing is .09.
What will the monthly withdrawal be to pay for both policies?
A ) $40.46
B ) $44.95
C ) $45.80
D ) $ 49.46
Question 10.) A client originally invested $40,000 in an Individual Variable Insurance Contract.
Its current guaranteed value is $40,000. The client subsequently withdrew $16,000 when the
market value was $64,000?
What is the amount guaranteed for maturity under the proportionate reduction method?
A ) $24,000
B ) $30,000
C ) $40,000
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D ) $42,000
Question 11.) Person A is considering withdrawing some of the funds from his Individual
Variable Insurance Contract. He contacts you to ask about the implications of doing so. All
of the following are TRUE EXPECT:
A ) Their maturity and death benefit guarantees would be affected.
B ) The amount withdrawn could be subject to tax as interest income.
C ) The amount withdrawn could be subject to tax as capital gains.
D ) Individual Variable Insurance Contract are not subject to tax when funds are withdrawn.
Question 12.) Anna joined a new employer 10 months ago. Sixty days prior to joining this
employer Anna had a back injury from a car accident. She has now re-injured her back.
The insurer may decline to pay any benefits using which contractual provision:
A ) Subrogation clause
B ) Pre-existing conditions clause
C ) All source maximum clause
D ) Offset clause
Question 13.) Caoline Johnson is married with two children and works in the Sales department of
Frog Ornament Company Inc. Caroline develops throat cancer and is unable to speak. She earns
$98,000/year. If she qualifies for disability, her Long-Term Disability benefits begin after 180
days at a reimbursement of 70% of monthly earnings to a maximum of $10,000/month. The
definition of disability is
Own-Occupationfor two years and
Any-Occupationthereafter. The
Primary Offsetprovision applies.

In order for Caroline to receive disability benefits tax free:
A ) Her employer must pay the tax on her behalf
B ) She must pay the premiums for the Long-Term Disability portion of the plan with after tax
dollars.
C ) She must file a T2033.
D ) She must be a member of the pension plan.
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Question 14.) Caoline Johnson is married with two children and works in the Sales department
of Frog Ornament Company Inc. Caroline develops throat cancer and is unable to speak. She
earns $98,000/year. If she qualifies for disability, her Long-Term Disability benefits begin after
180 days at a reimbursement of 70% of monthly earnings to a maximum of $10,000/month. The
definition of disability is
Own-Occupationfor two years and
Any-Occupationthereafter. The
Primary Offsetprovision applies.

How much would she receive monthly from the insurer?
A ) $8,166/mth minus Primary Canada Pension Plan benefit.
B ) $5,716/mth minus children
s benefit under Canada Pension Plan
C ) $5,716/mth minus Primary Canada Pension Plan benefit.
D ) $5,716/mth minus Full Canada Pension Plan benefit.
Question 15.) Craig Hunter is married with two children. Craig is a successful Optometrist. He
has 4 employees. Craig is well respected by both his employees and in his community. He is
active in a number of charitable organizations in the community. Craig has been the source of
numerous referrals over the years that he has been your client. Craig has decided that he needs to
purchase some additional life insurance, purchase some critical illness insurance and finally
purchase the disability insurance policy that you recommended to him 2years ago. During the
course of your interview with him, Craig tells you that he has taken up rock climbing as a hobby.
He climbs about once a month with a rock climbing club that he belongs to. You have attended
numerous social functions where Craig has been present and have seen him smoking a cigar.
Craig has not disclosed this on the applications that you have completed.
As Craig
s agent you have a fiduciary responsibility to:
A ) Tell Craig that he must answer all of the questions honestly and explain the consequences of
non-disclosure.
B ) Complete the information in the agent
s comments section of the application.
C ) Say nothing to Craig and submit the application the way Craig completed it.
D ) Take the application and when you get back to your office, change the information to be
correct.
Question 16.) Craig is well respected by both his employees and in his community. He is active
in a number of charitable organizations in the community. Craig has been the source of numerous
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referrals over the years that he has been your client. Craig has decided that he needs to purchase
some additional life insurance, purchase some critical illness insurance and finally purchase the
disability insurance policy that you recommended to him 2years ago. During the course of your
interview with him, Craig tells you that he has taken up rock climbing as a hobby. He climbs
about once a month with a rock climbing club that he belongs to. You have attended numerous
social functions where Craig has been present and have seen him smoking a cigar. Craig has not
disclosed this on the applications that you have completed.
As you are completing the disability insurance application, you notice that there are no
questions that ask about rock climbing in the hazardous activities area of the application.
How should you proceed with this application?
A ) Under Sports and Other Hazardous Activities you answer No and submit the application
B ) Complete the information in the agent
s comment section of the application.
C ) After explaining the consequences of non-disclosure, you answer Yes in the Hazardous Sport
and Other Activities and explain the rock climbing activities in detail.
D ) When you return to your office, you correct the answer on the application.
Question 17.) Craig is well respected by both his employees and in his community. He is active
in a number of charitable organizations in the community. Craig has been the source of numerous
referrals over the years that he has been your client. Craig has decided that he needs to purchase
some additional life insurance, purchase some critical illness insurance and finally purchase the
disability insurance policy that you recommended to him 2years ago. During the course of your
interview with him, Craig tells you that he has taken up rock climbing as a hobby. He climbs
about once a month with a rock climbing club that he belongs to. You have attended numerous
social functions where Craig has been present and have seen him smoking a cigar. Craig has not
disclosed this on the applications that you have completed.
While completing the financial part of the application for disability insurance, you ask
Craig what his income was for the last 3 years. He explains that he draws $75,000 a year
and that his wife earns $40,000 per year. He has decided that he wants to purchase
$3,000/mth of individual disability insurance. You ask Craig to provide you copies of his T1
General to submit with the disability application. Craig explains that his accountant has
found a way to have Craig pay no income tax for the last 3 years.
How should you proceed?
A ) Complete the application and submit it.
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B ) Explain the consequences of non-disclosure to Craig.

C ) Ask Craig to create written documentation providing his earned income.
D ) Explain how earned income is determined and why proper disclosure is important.
Question 18.) George and Sarah Wilson are husband and wife. George is 30. Sarah is 32. They
have a $200,000 mortgage. The balance on the term of their mortgage is 20 years. The decision
has been made to purchase life insurance to cover the outstanding balance on the mortgage
should one of them die prematurely. They have three children under the age of 5. Both George
and Sarah are professionals Sarah earns $70,000 per year. George earns $45,000 per year.
Which of the following is the LEAST APPROPRIATE product to fill their needs?
A ) Two individual T-5 renewable and convertible policies.
B ) Two individual T-10 renewable and convertible policies
C ) Joint last to die T-100 policy
D ) Joint first to die T-100 renewable and convertible policy
Question 19.) George and Sarah Wilson are husband and wife. George is 30. Sarah is 32. They
have a $200,000 mortgage. The balance on the term of their mortgage is 20 years. The decision
has been made to purchase life insurance to cover the outstanding balance on the mortgage
should one of them die prematurely. They have three children under the age of 5. Both George
and Sarah are professionals Sarah earns $70,000 per year. George earns $45,000 per year.
In addition, George and Sarah are each contributing to their own RRSP plan. Both are
members of an employee benefit package which provides for one times earnings for life
insurance, long term disability benefits at the maximum available with additional
underwriting, major medical and dental benefits. Sarah
s basic long term disability amount
is $2500 per month. George
s basic long term disability amount is $2500 per month. They
are also contributing to Registered Education Savings Plans for their children
s education.
Assuming George and Sarah are concerned about the current levels of disability insurance,
a recommended plan for disability protection would be:
A ) Top up George
s long term disability coverage with an additional $1250 per month of
individual disability insurance.
B ) Top up Sarah
s long term disability coverage with an additional $1000 per month of
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C ) Top up both George

s and Sarah
s long term disability coverage with an additional $1250 per
month of individual disability insurance.
D ) Top up neither George
s nor Sarah
s long term disability coverage with an additional layer of
Question 20.) Differences between a participating whole life contract and a nonparticipating whole life contract include:
A ) Participating whole life has a higher initial cost, while non-participating has a lower initial
cost.
B ) Participating whole life is an exempt policy contract, while a non-participating policy is not
exempt from annual taxation
C ) Participating whole life premiums depend on the success of the insurance company, while
non-participating policy premiums are guaranteed
D ) Participating whole life has no choice in dividend options while non-par whole life has a
choice in divided options.
Question 21.) Andrea Colletta invested in a deferred annuity contract 36 months ago. Her initial
deposit was $30,000 for a 5-year term at 7.5%. The contract allowed for early redemption after 2
years with a market value adjustment. Current interest rates, for a similar investment, have fallen
to 7%.
Andrea has decided that she needs access to $10,000 to return to school. She has an option
of either trying to redeem monies from her deferred annuity contract or obtaining a bank
loan for the funds.
Which of the following is the BEST option for Andrea to get these funds?
A ) Andrea must redeem the total value of the contract to get access to the $10,000 she requires
B ) Andrea should exercise her withdrawal right for $10,000 and earn 7.0% on the balance
C ) Andrea should exercise her withdrawal right for $10,000 with a market value adjustment and
leave the balance for the 3 years remaining in the contract at 7.5%
D ) ) Andrea should exercise her withdrawal right for $10,000 with a market value adjustment
and leave the balance for the 3 years remaining in the contract at 5.0%
Question 22.) Xavier Manufacturing is a small but very profitable manufacturer of specialized
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aviation equipment. Zahir is their top salesman and is responsible for 85% of their sales. The
President realizes that if something were to happen to Zahir, their business would be in serious
difficulty. They have decided to purchase some key man insurance on Zahir.
Which of the following statement/s is FALSE of key man insurance?
A ) If Zahir were to become disabled, the key man insurance policy would pay a monthly income
to the company during Zahir
s disability.
B ) To determine the amount of insurance that should be purchased, it is customary to value the
key man
s salary at 2 times monthly income.
C ) The benefit periods that are usually purchased are 6, 12 or 18 months.
D ) None of the above.
Question 23.) Gail and David Brown are a young married couple who both work in well paying
jobs. Gail is 34 and Davis is 42. Gail
s employer does not offer a pension plan. Gail earns
$58,000 per year. Davis is a member of a defined contribution pension plan through his employer.
Davis earns $77,000 per year. They have asked you to provide them with advice on how to best
plan for their retirement and how to reduce the taxes they must pay before they retire.
Which of the following would be the BEST advice for this couple to prepare for their
retirement and reduce taxes?
A ) Gail should split her Registered Retirement Savings Plan contribution between herself and
David.
B ) Gail should contribute 100% of her Registered Retirement Savings Plan contributions to a
spousal Registered Retirement Savings for David.
C ) David should contribute 100% of his available Registered Retirement Savings Plan
contributions to a spousal Registered Retirement Savings for Gale and Gail should contribute
100% of her Registered Retirement Savings Plan contributions to a spousal Registered
Retirement Savings for David.
D ) David should split his Registered Retirement Savings Plan contributions equally between
himself and Gail.
Question 24.) Gail and David Brown are a young married couple who both work in well paying
jobs. Gail is 34 and Davis is 42. Gail
s employer does not offer a pension plan. Gail earns
$58,000 per year. Davis is a member of a defined contribution pension plan through his employer.
Davis earns $77,000 per year. They have asked you to provide them with advice on how to best
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plan for their retirement and how to reduce the taxes they must pay before they retire.
Gail and David have decided that they should retire. Gail is now 54 and David is 62. David
cannot start receiving payments from his defined contribution pension plan without
incurring significant penalties, which has a normal retirement age of 65, Gail has $35,000
in her Registered Retirement Savings Plan. David has $100,000 in his Registered
Retirement Savings Plan. They have determined that they require $45,000 a year before tax
to live.
Which of the following options would be the MOST tax efficient way for them to draw from
their retirement plans?
A ) Have David withdraw $45,000 for the first two years and then $10,000 in the third year to
deplete his Registered Retirement Savings Plan.
B ) Have Gail withdraw nothing in the first 2 years and then $35,000 in the third year.
C ) Have Gail withdraw monies from her Registered Retirement Savings Plan in the 4th year to
supplement the payments from David
s pension plan to achieve the $45,000 before tax annual
income.
D ) All of the above.
Question 25.) Everett and Almira O
Toole are a married couple that have asked to speak to a life
insurance agent to discuss retirement options. Everett is 68 and Almira is 64. Everett has been
making contributions into in a Spousal Registered Retirement Savings Plan in Almira
s name;
this Registered Retirement Savings Plan now has a value of $225,000. Everett retired 3 years ago
at age 65 from his employer and has been receiving $3,000 per month from his pension. The O
Tooles hace asked you to educate them on their options for their Spousal Registered Retirement
Savings Plan.
You explain to the O
Tooles that all of the following statements about Registered
Retirement Income Fund are TRUE EXPECT:
A ) Registered Retirement Income Fund have no ceiling on the amount of payments that can be
withdrawn.
B ) Registered Retirement Income Funds permit you to postpone the first payment until the next
calendar year
C ) The minimum age of establishing a Registered Retirement Income Fund is age 60
D ) Registered Retirement Income Funds permit you to use a spouse
s age to determine the
minimum withdrawal amounts
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Question 26.) Keith Totten

s life insurance agent has just delivered a $200,000 10-year
renewable and convertible life insurance policy to him. Keith is worried that he might be laid-off
from his job and is concerned about how he will be able to pay for this policy in the future. The
agent explains that even though Keith paid the annual premium with the application, he has a 10
day right of rescission.
Which of the following statements is TRUE of the 10 day right of rescission?
A ) The client can return the policy and receive a full refund within a specified period of time
(usually 10 days)
B ) The client has the right to be protected against cancellation by the insurance company after
the policy has been enforce for more than two years.
C ) The client has the right to assign the policy.
D ) The client has the right to increase the face amount of the policy without medical evidence
for a specified period of time.
Question 27.) Jeremy and Sarah have a child named Angela with schizophrenia. They are
concerned about her future and want to make sure there will always be sufficient funds to
provide for her living expenses. Jeremy has a job with a national company and will be retiring in
4 years. They have a personal residence that is valued at $200,000 and is free of encumbrances.
They have a family cottage left to them from Jeremy
s father in the 60
s, that is now valued at
$100,000. Jeremy has Registered Retirement Savings Plans of $80,000. Sarah has no income and
no Registered Retirement Savings Plan at the current time. Jeremy will receive a pension in 4
years that is enough to cover the family
s current expenses. The company Jeremy works for has a
generous retirement program that continues his health and dental benefits indefinitely.
To ease Jeremy and Sarah
s mind you should suggest the following:
A ) Permanent life insurance policies on Jeremy and Sarah
B ) A term life insurance policy on Jeremy
C ) A long term care insurance policy on Sarah.
D ) A critical illness insurance policy on Jeremy.
Question 28.) Jeremy and Sarah have a child named Angela with schizophrenia. They are
concerned about her future and want to make sure there will always be sufficient funds to
provide for her living expenses. Jeremy has a job with a national company and will be retiring in
4 years. They have a personal residence that is valued at $200,000 and is free of encumbrances.
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They have a family cottage left to them from Jeremy

s father in the 60
s, that is now valued at
$100,000. Jeremy has Registered Retirement Savings Plans of $80,000. Sarah has no income and
no Registered Retirement Savings Plan at the current time. Jeremy will receive a pension in 4
years that is enough to cover the family
s current expenses. The company Jeremy works for has a
generous retirement program that continues his health and dental benefits indefinitely.
Jeremy and Sarah
s daughter Angels is 25. She is covered under Jeremy
s company drug
plan for another year. Angela is in treatment and the doctors say she will be able to live
independently and have a job. Angela is not expected to earn in excess of $25,000 per year,
in today
s dollars. She will need to find an employer that is flexible and understand Angela
s medical requirements. Jeremy and Sarah would like to provide with an income
supplement of $20,000 per year. They are selling the cottage to purchase a small condo for
Angela. If Jeremy dies first Sarah will provide for Angela and if Sarah dies first Jeremy
will provide for Angela. At the death of both Jeremy and Sarah, they have requested their
executor sell the matrimonial home, and liquidate all other assets to provide a lump sum of
cash available to provide Angela with an income. Jeremy and Sarah have assumed a tax
rate of 50% in their calculations. They have discounted any group life insurance, as Jeremy
will be retiring in 4 years. What further steps would you suggest Jeremy and Sarah take to
ensure for Angela
s future security?
A ) Purchase a joint last to die permanent life insurance policy naming a trustee to look after
Angela
s investments, and a critical illness policy on each of Jeremy and Sarah.
B ) Purchase a long-term care policy for both Jeremy and Sarah and a joint last to die permanent
life insurance policy on Jeremy and Sarah, will a settlement option of a life annuity for Angela.
C ) Purchase a critical illness policy on Angela
s life and a permanent life insurance policy on
Sarah
s life.
D ) Purchase a term life insurance policy and a long term disability insurance policy on Jeremy
s
life.
Question 29.) Milton and Sally Swanson are ready to start receiving monthly pension payments
from Milton
s pension plan. Sally has RRSP holdings totaling $50,000 currently invested in an
Individual Variable Insurance Contract with Milton as the beneficiary. They are looking for
advice on which option to choose for Milton
s pension plan payments. It comes to your attention
that Sally is terminally ill.
Which of the following options would be the BEST recommendation for Milton
s pension?
A ) Have Sally sign a spousal waiver and Milton choose a Single life-10 year guarantee.
B ) Joint and survivor 100% continuance.
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C ) Joint and survivor 60% continuance.

D ) Joint and survivor 60% continuance 10 year guarantee.
Question 30.) Richard and Bev are married. Richard is 63. Bev is 71. Richard has a monthly
pension benefit of $2,500. Bev has Registered Retirement Savings Plans totaling $250,000. Both
are collecting Canada Pension Plan. Bev has decided to convert her Registered Retirement
Savings Plans to a Registered Retirement Income Fund. They have adequate income to meet
their living expenses.
What is the MOST tax effective way to draw her income from her Registered Retirement
Income Fund?
A ) Take minimum Registered Retirement Income Fund payments based on Richard
s age.
B ) Take minimum Registered Retirement Income Fund payments on Bev
s age.
C ) Take maximum Registered Retirement Income Fund payments based on Richard
s age.
D ) Take maximum Registered Retirement Income Fund payments based on Bev
s age.
Question 31.) Ann Collins has an Individual Variable Insurance Contract with a major Canadian
insurance company. The value of her Individual Variable Insurance Contract is $89,500. The
insurance company has just declared bankruptcy.
What industry compensation fund would address Ann
s losses?
A ) Canada Deposit Insurance Corporation for $89,500.
B ) Canadian Investor Protection Fund for $60,000.
C ) Assuris for $76,075
D ) Assuris for $60,000
Question 32.) Irene is a single mom. Her husband Allan died of a brain aneurysm at the age of 34.
At the time, they had twin two year old girls and Irene was operating her own private
physiotherapy clinic. Irene had been working half time in the clinic, so that she could spend more
time with the children. She is now working full time to provide for her children. Allan and Irene
did not have any life insurance. They each had a Registered Retirement Savings Plan valued at
$30,000. Their home was valued at $190,000 with a mortgage of $90,000. Irene had cancelled
her disability insurance when she had the babies. Her business was started with a loan from the
bank of $50,000 and now has a net business value of $100,000.
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Irene
s twins were born prematurely and had some minor health problems at their birth.
The doctors confirm a 90% chance all health difficulties will disappear by the age of 5, but
until then regular quarterly physicals are required and a speech pathologist may be
required. Irene must pay for her children
s childcare requirements while she is running the
clinic. Her annual earnings are about $75,000 after her business expenses. The cost for two
young children to attend a good childcare program is almost $2,000 per month. By the time
Irene pays the children expenses, her mortgage payment of $1,000 per month, groceries,
diapers, and other necessities, she has little disposable income. She is concerned about
saving for the future and is afraid she will not be able to contribute to her Registered
Retirement Savings Plans. Of the options listed below, which will BEST MEET her current
insurance needs considering hew limited budget?
A ) A term 10 life insurance policy $1,000,000 a family health and dental package, and a critical
illness policy for $1,000,000.
B ) An individual disability policy with a 30 day wait and an own occupation definition, with a
whole life participating policy.
C ) A basic business owner income loss replacement plan with a 90 day wait and partial
disability benefits, a regular occupation definition, payable to age 65 with Cost of living
Adjustment, a term 10 Renewable and Convertible policy for $1,000,000, and a basic family
health care package.
D ) A universal life policy with Level Cost of Insurance pricing, a professional own occupation
individual disability insurance policy with a 30 day wait and a return of premium rider, a group
health and dental plan including a short term disability, and a critical illness policy.
Question 33.) Bonnie Mahoney is a 42 year old widow with 2 children ages 12 and 9. When her
husband died, he did not have any life insurance. She earns $45,000 per year. Bonnie
s only
other assets are her automobile and household belongings. Bonnie has a comprehensive
employee benefit package through her employer that includes life insurance at one times her
salary, short and long term disability insurance and major medical. Bonnie is just about to
complete the purchase of new home. This home will have a very large mortgage. She wants to be
certain that if she should die, the children would be able to continue to live in the home. Bonnie
s
sister has agreed to become the legal guardian for the children should Bonnie die.
Which of the following is the MOST APPROPRIATE insurance product for Bonnie to
purchase?
A ) Individual Disability Insurance
B ) Individual Whole Life Insurance
C ) Maximum funded Universal Life Insurance
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D ) 10 year renewable and convertible term insurance

Question 34.) Joseph and Maria Wilk are going to Europe for a holiday in one week. Before they
get on the plane, they would like to make sure their children are provided for according to their
wishes. They thought if they applied for life insurance today, they would be insured immediately.
You explain the process of applying for life insurance today, they would be insured immediately.
You explain the process of applying for life insurance and they express their concern about the
length of time the process takes.
The temporary insurance agreement will be in force at what point?
A ) Once the Wilks have signed the application.
B ) Once the Wilks have paid the premium.
C ) Once the Wilks have completed the application for Temporary Insurance Agreement.
D ) Once A, B and C have been completed.
Question 35.) Which of the following statement/s is/are TRUE?
A ) Guaranteed Investment Certificates are protected by Assuris.
B ) Deferred annuities are protected by the Canada Deposit Insurance Corporation.
C ) Deferred annuities and Guaranteed Investment Certificates are issued by banks.
D ) Deferred annuities and Guaranteed Investment Certificates are available on a redeemable
basis.
Question 36.) Pension Adjustment has the following effect:
A ) Increase Canada Pension Plan contribution.
B ) Decrease contributions to Registered Pension Plan
C ) Decreases contribution level to Registered Retirement Savings Plan
D ) Increases contribution to Deferred Profit Sharing Plan
Question 37.) If an Individual Variable Insurance Contract is purchased with a deferred
sales charge, which of the following statements is TRUE:
A ) A higher management fee is charged to the client.
B ) The contract provides for death and maturity guarantees.
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C ) The client can move funds to another fund with no surrender charge.
D ) The contract does not permit partial withdrawals.
Question 38.) Mickey Macland is a life insurance agent who has a large clientele. He has
developed his practice and is highly regarded for his expertise in the investment of registered and
non-registered monies. Mickey was anticipating a large quarterly cheque from the insurance
company for compensation for his book of investment business. The investment returns on his
client
s portfolios are down this quarter as a result of poor performance in the marketplace.
Mickey was counting on this cheque from the insurance company to finalize the purchase of his
new condominium at a ski resort. He is now faced with the challenge of producing $50,000 by
the end of the month or lose his initial down payment on the condo. Mickey decides to do a
partial withdrawal from one of his largest client
s account. He knows that this client is travelling
and relies heavily on Mickey to look after his investments. The client is not expected back to the
country for 3 to 4 months. Mickey issues a letter over his client
s signature to do a partial
withdrawal from one of the client
s 4 accounts. Mickey is sure that his next quarterly
compensation cheque will be quite large as he is confident that the markets will turn around. He
intends to replace the amount withdrawn from his client
s account as soon as he receives the next
quarterly cheque.
The agent could be charged in the following manner:
A ) Theft and forgery in small claims court.
B ) Theft and forgery under civil law.
C ) Misrepresentation, theft and forgery under civil law.
D ) Theft and forgery under the criminal code.
Question 39.) Julia and her brother James are now running a long established and successful
family business. Their parents sold them the business 5 years ago. The parents still receive
income from the sale of the business in the form of dividends to repay the loan. Mom and Dad
still own preferred shares of the business. The accountants and lawyers were able to structure the
transfer so that no tax was payable by MOM and DAD on the sale of the business at that time.
The tax bill from the disposition of Mom
s and Dad
s shares is due:
A ) At the death of Mom.
B ) At the last parent
s death.
C ) When the loan is completely repaid.
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D ) When the dividends are paid.

Question 40.) Julia and her brother James are now running a long established and successful
family business. Their parents sold them the business 5 years ago. The parents still receive
income from the sale of the business in the form of dividends to repay the loan. Mom and Dad
still own preferred shares of the business. The accountants and lawyers were able to structure the
transfer so that no tax was payable by MOM and DAD on the sale of the business at that time.
The MOST cost effective way for the tax bill to be paid is:
A ) A loan at the bank for the amount of tax due.
B ) A sinking Fund starting today.
C ) The sale of assets within the business.
D ) Purchase a joint last to die life insurance policy that is payable when the tax is due.
Question 41.) Alice Smithson has suffered from back problems since her childhood. When
she applies for the necessary individual disability insurance she can expect:
A ) Rated Coverage
B ) An exclusion
C ) To be declined
D ) To pay an extra charge per hundred per month
Question 42.) John and Marsha Williams have decided to purchase $100,000 whole life
insurance policies. They also believe that they need an additional $200,000 to be able to pay off
the mortgage on their new home if something should happen to them. Their agent has suggested
that they add 10 year term insurance riders to the permanent policies.
Which of the following is NOT an advantages to a term insurance rider.
A ) By adding the term insurance as a rider to the permanent policy, the client will not have to
pay an additional policy fee.
B ) The client will have the option to convert the term insurance rider to permanent insurance for
a period of time without having to provide evidence of insurability.
C ) The term rider may be removed from the permanent policy if the insurance need ceases to
exist.
D ) The term insurance rider will automatically become permanent insurance in 10 years.
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Question 43.) Abdul Makkar was born on August 1, 1955. His wife, Jasmine, was born on
December 3, 1953. They are employed by different employers. Abdul
s benefits plan provides
Basic Dental Coverage at 80% co-insurance, with no deductible and an overall maximum of
$1,500 per person per year. Jasmine
s benefits plan provides Basic Dental Care Coverage with
100% co-insurance, no deductible, and 50% co-insurance for major Restorative with a maximum
of $1000 per person per year. They both pay for family coverage with their employers.
Abdul had basic dental services performed for $950 and had two crowns for a total of
$2,500.
Which of the following answers correctly outlines how the insurers would coordinate their
payments for Abdul
s dental claim?
A ) Abdul
s plan would pay $950 for the basic dental claim minus the co-insurance amount.
B ) Jasmine
s plan would pay the 20% from the co-insurance that Abdul
s plan did not pay, plus
50% of the $2,500 Major Restorative portion to a maximum of $1,000
C ) Abdul
s plan would pay for the entire $3,450 claim minus the co-insurance amount.
D) A& B
Question 44.) Abdul Makkar was born on August 1, 1955. His wife, Jasmine, was born on
December 3, 1953. They are employed by different employers. Abdul
s benefits plan provides
Basic Dental Coverage at 80% co-insurance, with no deductible and an overall maximum of
$1,500 per person per year. Jasmine
s benefits plan provides Basic Dental Care Coverage with
100% co-insurance, no deductible, and 50% co-insurance for major Restorative with a maximum
of $1000 per person per year. They both pay for family coverage with their employers.
Jasmine has just taken their 10 year old daughter to the dentist. She has a $250 bill for
basic dental and $600 bill for a crown that her daughter requires.
Which of the following outlines how this claim will be handled by the insurance
company/companies?
A ) Abdul
s insurer will pay $200 for basic dental, Jasmine
s insurer will pay $50 for basic dental
and $250 for the crown.
B ) Jasmine
s insurer will pay $250 for basic dental and $300 for the crown.
C ) Abdul
s insurer will pay $200 for the basic dental and Jasmine
s insurer will pay $50 for
basic dental and $300 for the crown.
D ) Jasmine
s insurer will pay $250 for basic dental and $600 for the crown.
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Question 45.) Mitchell Campbell is 45 and has been contributing to his Registered Retirement
Savings Plan for the past 10 years. Mitchell earns $85,000 per year. He is a member of a defined
contribution pension plan with his employer. His wife, Margaret, is 40 years and has never
worked outside of the home. They have one daughter, Judy, who is 18 and attending university.
The funding of her education has been provided for because the Campbell
s set up a Registered
Education Savings Plan when Judy was born. Mitchell has decided that he should be giving
serious thought about the retirement. He has asked an agent to come and talk to him about
planning for his retirement and using strategies to reduce taxes. After reviewing all of the
information on these clients, the agent explains the advantages of providing for income splitting
when they retire.
Mitchell has decided that he will take the recommendations of the agent and set up a
spousal Registered Retirement Savings Plan. Under Mitchell
s defined contribution pension
plan, he contributes 5% of his annual income. His employer matches the contributions that
Mitchell makes.
How much can Mitchell contribute to a spousal Registered Retirement Savings Plan
annually?
A ) $6,800
B ) $15,300
C ) $16,500
D ) $18,000
Question 46.) Robert DeMone is a 38 year old single professional earnings $85,000 per year.
Robert owns his home mortgage free. He has a comprehensive employee group benefits package
that includes life insurance at 2 times his annual income, short and long-term disability, major
medical and critical illness. Robert
s father was diagnosed with Parkinson
s Disease when he was
age 62. Robert does not plan to marry. He is an only child and is concerned about what will
happen to him if he should become seriously ill.
Which of the following types of insurance should Robert consider purchasing?
A ) Life insurance
B ) Long-term care insurance
C ) Disability insurance
D ) Critical illness insurance
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Question 47.) Gail Brown purchased a non-registered Individual Variable Insurance Contract on
her 55th birthday in the amount of $100,000. She made her husband David her beneficiary on this
policy contract. Gail was self-employed as a business consultant. Gail is in a 50% tax bracket. In
the past few years, as a result of poor health, Gail
s business was experiencing some cash flow
difficulties. This policy contract contains a 10 year maturity guarantee and a 100% death benefit
guarantee. This policy contract also contains reset options that are exercisable four times per year.
Due to market conditions, Gail had only exercised one reset option on her 58th birthday at a value
of $116,897. Unfortunately, Gail died last week, 6 weeks after her 64th birthday. The market
value of her Individual Variable Insurance Contract at her date of death was $114,396. Upon
Gail
s death, she had business liabilities for which she had issued a personal guarantee. Her
creditors have made application for payment of these outstanding liabilities totaling $164,602.
The bank is seeking recourse against this policy contract.
The total book value that the bank can receive for these liabilities from this policy contract
is:
A ) $0
B ) $114,396
C ) $100,000
D ) $164,602
Question 48.) Gail Brown purchased a non-registered Individual Variable Insurance Contract on
her 55th birthday in the amount of $100,000. She made her husband David her beneficiary on this
policy contract. Gail was self-employed as a business consultant. Gail is in a 50% tax bracket. In
the past few years, as a result of poor health, Gail
Gail
The value that David would receive from this policy contract after probate fees would be:
A ) $50,000
B ) $58,448
C ) $100,000
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D ) $116,897
Question 49.) Gail Brown purchased a non-registered Individual Variable Insurance Contract
on her 55th birthday in the amount of $100,000. She made her husband David her beneficiary on
this policy contract. Gail was self-employed as a business consultant. Gail is in a 50% tax bracket.
In the past few years, as a result of poor health, Gail
Gail
If Gail had decided to cash in her Individual Variable Insurance Contract to provide
capital for her business one year ago on her 63rd birthday, when the market value was
$81,576, how much would she have received when she surrendered the policy contract?
A ) $81,576
B ) $100,000
C ) $114,396
D ) $116,897
Question 50.) Tanya and Wayne have two children. Their son, Jonathan
s ability to earn income
is restricted as a result of his disability, but he would not be entitled to a tax free rollover of his
parentsRegistered Retirement Savings Plan at their death. Tanya and Wayne have saved as
much funds as they could in their Registered Retirement Savings Plans. They have had
significant expenses to pay for Jonathan
s disability. All they really have left is their home
valued at $150,000, their $200,000 Registered Retirement Savings Plan portfolio, and their
pensions. Tanya and Wayne have had discussions with their daughter, Jennifer. She has assured
them of her financial stability and asked them to concern themselves only with Jonathan
s
inheritance. Tanya and Wayne would like as much of their assets as possible to be transferred to
Jonathan through their estate. They have just discovered the consequences of tax due at their
death, in relation to their Registered Retirement Savings Plan. They are looking for a solution to
their tax problem.
Which of the following strategies should you suggest?
A ) Take minimum Registered Retirement Income Fund payments at age 71.
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B ) Purchase a permanent joint last to die policy for the estimated tax bill.
C ) Purchase a universal life contract with maximum funding through Registered Retirement
Income Fund proceeds on Tanya
s life
D ) Purchase a universal life contract with maximum funding through Registered Retirement
Income Fund proceeds on Wayne
s life
Question 51.) Josh Markham is a truck driver who is employed by a well established trucking
firm. While Josh
s annual income is quite high, $78,000, he does not have any group employee
benefits provided by his employer. Josh
s agent has shown him a cancellable individual disability
policy and a guaranteed renewable policy. The agent has suggested that Josh consider the
cancellable policy.
Which of the following would be reasons for the agent to make this recommendation?
A ) The pricing and ease of underwriting of this policy.
B ) The risk classification as a result of Josh
s occupation.
C ) The contractual definitions of this policy.
D ) A, B & C
Question 52.) Cheryl Young has been investing in Individual Variable Insurance Contracts
through her agent for the past 12 years. A recent inheritance has been Cheryl $20,000 to invest.
She has called her agent to meet with her with instructions that she wants to diversify her
investments into a different type of IVIC?
When does Cheryl need to receive a Summary Information Folder for a new IVIC?
A ) There is no need for a Summary Information Folder as she already has investments in IVIC
B ) The agent must have the Summary Information Folder delivered to Cheryl prior to their
meeting so that she can review the contents.
C ) Cheryl must receive the Summary Information Folder prior to completion of the application
for an Individual Variable Insurance Contract
D ) Cheryl must receive the Summary Information Folder within three business days of the
purchase of the IVIC.
Question 53.) Marie Coxwell is 50 and Gerald is 56. They are both employed, but their
employers do not offer a pension plan. Marie re-entered the workforce 5 years ago and is earning
$24,000 per year. Gerald is earning $125,00 per year. Gerald has been maximizing his Registered
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Retirement Savings Plan contributions for the last 20 years. Marie does not have any Registered
Retirement Savings Plans. Hey have asked you to review their situation to determine how they
can retire most efficiently at Gerald
s age 65.
The MOST effective way to provide for retirement income would be to:
A ) Have Marie contribute to Gerald
s Registered Retirement Savings Plan
B ) Have Gerald make full future contributions to a spousal Registered Retirement Savings Plan
C ) Have Gerald contribute 50% of his future contributions to a spousal Registered Retirement
Savings Plan
D ) Transfer 50% of Gerald
s current Registered Retirement Savings Plan holdings to a spousal
Registered Retirement Savings Plan
Question 54.) Gail and Michael are a married couple. Michael is earning $54,000 per year and
Gail is earning $63,000 per year. They hope to be able to retire within the next % years. They
have both been fortunate to work for employers who provide a defined-benefit pension plan.
They do not have any other Registered Retirement Savings Plans. Their home, which is their
principal residence, is mortgage free and valued at $450,000. They own a cottage that was
purchased for $80,000 that is now worth $150,000. They have an adult physically handicapped
child, Jeff, who is not capable of being self-supporting. They know that they need to make some
financial arrangements for the ongoing care of their handicapped child. Jeff
s life expectancy is
age 64 and he is currently 31. They have found an excellent long-term care facility for Jeff and
want to be certain that there are sufficient funds to enable Jeff to live out the rest of his life in this
excellent facility. The annual cost for this facility is $36,000.
Without taking into consideration any tax implication and assuming a 3% return on
investment, how much money would need to be invested to provide for the annual fees for
Jeff
s long-term care facility without encroaching on the capital?
A ) $750,000
B ) $1,050,000
C ) $1,188,000
D ) $1,200,000
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Gail and Michael want to leave a donation to charity that is raising money for research into
Jeff
s medical condition. They don
t want this donation to have any impact on Jeff
s ability
to live in the long-term care facility that they have chosen for him. They have discussed
purchasing insurance to fund Jeff
s care, any outstanding tax liabilities that would arise
when they both die and the donation for their chosen charity. What would be the taxable
capital gain on their home and their cottage if they both died today assuming a 45% tax
bracket?
A ) $15,750
B ) $35,000
C ) $75,000
D ) $104,000
Based on your recommendation, Gail and Michael have decided to address their desired
financial goals on death by purchasing life insurance. Of the following, what would be the
BEST product to meet their needs?
A ) Term to 100 on Michael
s life
B ) Term to 100 on Gail
s life
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C ) Joint first-to-die Term to 100 on both lives.

D ) Joint last-to-die term to 100 on both lives.
Question 57.) The Albright Manufacturing Company is owned by John Albright. John is 60 years
of age and has owned and operated this company for the past 25 years. He started the company
from scratch and is highly regarded by his clients. His two sons, Mark, age 35, and Matthew, age
33, are each employed by the company in senior positions. Mark is running the manufacturing
side of the company and Matthew is running the sales and distribution side of the company. John
has started to consider retiring within the next 5 years and must give consideration to what
should happen to the company at that time. He has already transferred ownership of 50% of the
shares of the company equally split between Mark and Matthew. Upon his death, John
s wife
will become the owner of the 50% of the shares now held by John. Mark and Matthew both plan
to continue with the company after their father retires from the business. They both recognizes
that when their father leaves the business, either through retirement or death, that it will be a
significant loss to the business.
John has decided that there are issues that can be effectively addressed through the
purchase of some insurance.
The first issue that john wants to address is any capital gains that would be triggered on his
death. The BEST policy to address these concerns would be:
A ) Purchase a joint first-to-die universal life policy on the lives of John and his wife.
B ) Purchase a maximum funded universal life policy oh John
s life.
C ) Purchase a term to 70 policy on John
s life.
D ) Purchase a joint last-to-die term to 100 policy on the lives of John and his wife.
s wife
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John knows that he does not want to work beyond age 65. He wants to be free to do some of
the things that he put off while building this business. He has successfully invested over the
years and therefore is confident that he and his wife will be able to enjoy retirement. He is
still concerned about the succession of the business to his sons. If he should predecease his
wife, she will become the owner of 50% of the shares of the corporation. She has never been
involved in the business and does not possess the skills or desire to run the business. John
would like his wife to have the benefit of the value of the shares should he predecease her.
The BEST way to accomplish this would be to:
A ) Transfer ownership of the shares to the 2 sons when John retires.
B ) Purchase a Term to 100 policy on John with Mark and Matthew as the beneficiaries and use
the proceeds to purchase the shares from John
s wife if John should predecease her.
C ) Transfer the ownership of the shares to John
s wife upon John
s retirement
D ) Purchase a universal life policy on John
s wife with Mark and Matthew as the beneficiaries
and use the proceeds to purchase the shares from John
s wife if John should predecease her.
s wife
It is 10 years later and Matthew who is 43 and mark who is 45 each own 50% of the shares
of Albright Manufacturing. Both men are key to the successful continuation of this business.
They decide to purchase key person life insurance to purchase the outstanding shares if one
of them should die.
Which of the following products would BEST provide for the long-term funding for the
purchase of the outstanding shares when either Mark or Matthew dies?
A ) A joint last-to-die term to 100 on both lives.
B ) A joint last-to-die universal life policy issued on both lives.
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C ) A joint last-to-die 10 year renewable and convertible term policy issued on both lives.
D ) A term to 100 policy issued on each life.
Question 60.) Patrick Donahoe purchased a disability insurance policy 10 months ago. Patrick
suffered a minor heart attack today and will be unable to work for a period of approximately 4
months. Patrick contacts his agent who agrees to meet with him and assist with completing the
disability claim forms for submission to the insurer. While completing the claim forms Patrick
tells his agent that he is the same age that his father was when he had his first heart attack. The
agent has an uneasy feeling because he does not believe that Patrick disclosed the information
about his father
s heart condition on the application that they submitted to the disability
insurance company. The agent returned to this office and pulled out his file on Patrick. After
reviewing his copy of the policy, the agent determined that Patrick had not disclosed the
information regarding his father
s heart condition.
What would you expect the insurance company to do with this claim?
A ) Rescind the contract for non-disclosure
B ) Deny the claim
C ) Postpone paying the claim until they re-underwrite the policy
D) B& C
Question 61.) Mr. Jones has been a member of the ABC Company group benefits plan for 5 years.
He is a non-smoker who is in excellent health. His employment will be terminated in 14 days.
Which of the following statements is NOT ACCURATE?
A ) He has thirty days from his termination date to convert his group life insurance.
B ) The cost of converting group insurance will always be lower than the cost of purchasing a
medically underwritten, individual policy
C ) Some companies will allow the conversion of group Long-Term Disability to an individual
policy
D ) Group policies will often limit the face amount that may be converted
Question 62.) Clifford Worden has made the decision to purchase a life insurance policy. While
completing the application he is bothered that you have asked for information about his annual
income.
You explain to him that the insurance company wants information about his annual income
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to:
A ) determine the applicants ability to pay the policy premiums and to justify the amount of
insurance coverage being requested.
B ) determine if the amount of insurance is appropriate for the beneficiary designated
C ) determine if the applicant has selected the correct dividend option
D) A& B
Question 63.) A lending officer for a finiancial institution met with your client last week. Your
client was reviewing his line of credit with the bank. He also has mortgage with the same bank.
The lending officer strongly suggested your client renew his life insurance through that
institution
s insurance subsidiary. The lending officer suggested that the bank would not look
favourably on his line of credit if the insurance was not placed with the banks insurance
subsidiary. He explained that although he does not a license to sell insurance, he could get their
agent to arrage everything. Your client is a bit uncomfortable and calls you to explain his
position. You are concerned that the lending officer is acting inappropriately.
You should suggest to the client that the following fiduciary duty is being breached:
A ) Coercion
B ) Duty to Disclosure
C ) Negligence
D ) Conflict of interest
Question 64.) Which of the following is NOT an advantage of whole life insurance?
A)
B)
C)
D)
Guaranteed Cash Values

Tax sheltered Accumulation
Tax free withdrawal of cash values when the adjusted cost base is zero
Lower net present value cost in the long term, in comparison to renewable term payable
over the same period of time.
Question 65.) The following are differences between Level Cost of Insurance and Yearly
Renewable Term mortality costing in a universal life insurance contract:
A ) Level Cost of Insurance has a level mortality cost structure while Yearly Renewable Term
has escalating mortality costs.
B ) Level Cost of Insurance has a higher cost of insurance in the early years, while Yearly
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Renewable Term has a lower cost of insurance in the early years.

C ) Level Cost of Insurance is more effective for cash accumulation purposes, while Yearly
Renewable Term is more effective for increasing the death benefit
D) A& B
Question 66.) Miss Jones has satisfied her three-month probation period and has worked for her
employer for a total of six months and earns $1,000/week, before taxes (gross) and $742/week
after taxes (net). Her Short-term disability plan has a waiting period of two weeks, a benefit
period for 15 weeks and a taxable salary reimbursement of 66.7% of weekly earnings to a
maximum of $600/week.
If she becomes disabled, how much can she expect to receive in benefits?
A ) $667/wk taxable
B ) $600/wk non taxable
C ) $494/wk non taxable
D ) $600/wk taxable
Question 67.) Kripa Mathar has asked his life insurance agent to meet with him. Kripa suspects
that he needs to purchase some life insurance to address any tax liabilities that could become due
on his death. Kripa is 59, single and does not expect to get married. His intention is to leave all of
his assets to his nephew who has worked with him in his business for the last 10 years. Kripa is a
very conservative investor. He only invests in guaranteed investments for his Registered
Retirement Savings Plan.
Knowing how conservative Kripa is, which of the following types of insurance policy would
you recommend?
A ) Whole life non par
B ) Universal life
C ) 10 year renewable and convertible term insurance
D ) 5 year renewable and convertible term insurance
Question 68.) Whose BEST interest does the agent look out for first?
A) The agent
B) The insurance company
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C) The client
D) The beneficiaries
Question 69.) Eileen MacKay has been substitute teaching at a local private school. Eileen would
really like to get a full time teaching position at this school. Eileen is a single mother with two
children ages 8 and 13. Eileen has been approached by a life insurance agent to try to get her
purchase a universal life insurance policy. While Eileen knows that she needs some insurance to
protect her children, she only wants to purchase term insurance because that is what she believes
she can afford. The life insurance agent serves as a volunteer member of the Board of Directors
at this school. The agent advises Eileen that if she doesn
t purchase the universal life policy, that
he will advise the President of the Board of Directors of the school that Eileen is not a suitable
person to teach at the school because of the poor judgment.
Which of the following fiduciary duties is the agent breaching?
A)
B)
C)
D)
Duty to disclose
Undue influence
Coercion
Misrepresentation
Question 70.) Common sense

Question 71.) Angela, age 71, and Victor, aged 65, are married. Angela has $525,000 in a
Registered Retirement Income Fund. Victor is the designated beneficiary. If Angela were to
die later this year, what would happen to the Registered Retirement Income Fund?
A ) Under the spousal rollover provision, Victor could transfer the proceeds of Angela
s
Registered Retirement Income Fund directly into his own Registered Retirement Income Fund or
Registered Retirement Savings Plan and thereby avoid any immediate tax implecations on the
funds.
B ) Victor would not be able to rollover Angela
s funds into a Registered Retirement Income
Fund in his name because he had not attained the age of 71.
C ) Regardless of who is named as the beneficiary, these is no way to avoid the taxation of the
funds from Angela
s Registered Retirement Income Fund in the year of the death. However,
because a beneficiary has been name, the funds will not form part of her estate and therefore,
probated fees will not apply.
D ) If Victor chooses to do so, he can transfer the proceeds of Angela
s Registered Retirement
Income Fund into the Registered Retirement Savings Plan of his financially independent
daughter and thereby avoid any immediate tax implications on the funds.
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Question 72.) Eva Lewis is a single professional. Eva is 46 years of age. Eva works for a large
employer who offers a comprehensive employee benefits program that includes life, major
medical, short and long-term disability, and a defined contribution pension plan. Eva has been
discussing her long-term goals with her life insurance agent. Eva
s mother was in a nursing home
for many years before she passed away at the age of 87.
As Eva
s life insurance agent, which of the following products would you recommend she
should consider adding to her portfolio?
A ) Universal life insurance and individual disability insurance
B ) Critical illness and universal life insurance
C ) Critical illness and long-term care insurance
D ) Critical illness and individual disability insurance
Question73.) Tom and Wendy Callard are recent university graduates who were married 6
months ago. Tom is 24 and Wendy is 26. They are currently renting an apartment. They do not
believe that they have any need for life insurance but would like to start an investment program.
They do not plan to have any children. The only debt that they have at this time is a $35,000 loan
that is left on a car that they purchased with a 0% financing rate. They have $15,000 that was left
to Tom by his grandfather who passed away 6 months ago. They want to purchase a condo
within the next 4 years. They would like to start Registered Retirement Savings Plans for both
Tom and Wendy. They can allocate $200 per month towards these Registered Retirement
Savings Plans. They believe that since they are young, they have a high risk tolerance for their
investment plans.
Based on the information above, which of the following would NOT BE AN
APPROPRIATE investment recommendation for this couple:
A ) A maximum funded universal life policy.
B ) $15,000 into a bond fund and $200 per month into an asset allocation fund.
C ) $15,000 into an equity fund and $200 per month into a money market fund.
D ) $15,000 into a real estate fund and $200 per month into an equity fund.
Question 74.) Tom and Wendy Callard are recent university graduates who were married 6
months ago. Tom is 24 and Wendy is 26. They are currently renting an apartment. They do not
believe that they have any need for life insurance but would like to start an investment program.
They do not plan to have any children. The only debt that they have at this time is a $35,000 loan
that is left on a car that they purchased with a 0% financing rate. They have $15,000 that was left
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to Tom by his grandfather who passed away 6 months ago. They want to purchase a condo
within the next 4 years. They would like to start Registered Retirement Savings Plans for both
Tom and Wendy. They can allocate $200 per month towards these Registered Retirement
Savings Plans. They believe that since they are young, they have a high risk tolerance for their
investment plans.
It is 10 years later, and Tom and Wendy have bought their condominium. Tom is employed
with a large firm, earnings $75,000 per year who offers a comprehensive benefit package
which includes a defined contribution pension plan. Tom
s defined contribution pension
plan only allows for additional registered contribution room of $5,600 per year. Wendy
started hew own firm 12 months ago and is earning $59,000 per year. They need to
reconsider their investment options. They still believe that they a high risk tolerance and
want some recommendations on what they should do with their investment portfolio. They
now have $1000 a month that can be used for investment purposes.
Which of the following choices would be the LEAST APPROPRIATE recommendation for
future investments:
A ) Set up a spousal Registered Retirement Savings Plan in Wendy
s name, with Tom making
the contributions of $460 per month invested in an equity fund and $540 per month invested in a
non-registered bond fund.
B ) Invest $1,000 a month into a Registered Individual Variable Insurance Contract investing in a
money market fund in Tom
s name.
C ) Set up a Registered Individual Variable Insurance Contract in Wendy
s name making
contributions of $885 per month invested in Tom
s name.
D ) Set up a Registered Individual Variable Insurance Contract in Tom
s name investing $460
per month in an asset allocation fund and a Registered Individual Variable Insurance Contract in
Wendy
s name investing $540 per month in a bond fund.
Question 75.) As a life insurance agent, you have just managed to secure an appointment with a
prospective client James Green and Edgar Sinclair own a very profitable Landscape Architecture
business. They have operated this business for 10 years and have 5 full-time employees with the
number of employees growing to 35 in the summer months. After completing a full financial
review of the business and personal portfolios, you recommend that they should give serious
consideration to putting a Buy Sell Agreement in place.
What should be the first recommendation that you make?
A ) You should draft a Buy Sell Agreement for them so that they can complete it as soon as
possible
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B ) You recommend that they consult with both an accountant and a lawyer to arrange for a
professional evaluation of their business
C ) You should complete a proper needs analysis to determine the amount of insurance necessary
to fund the Buy Sell agreement
D ) Complete application for 3 Universal Life policies to fund the Buy Sell Agreement
Question 76.) Andrew and Stella Lypka, a husband and wife, have just purchased a new home.
They have a mortgage on the home of $200,000. Both Andrew and Stella work for employers
who do not offer any employee group benefits. Andrew works as a fee for service consultant in
environment engineering. Stella works as an executive assistant. They are expecting their first
child in six months. Andrew has an annual income of $60,000 and Stella has an annual income of
$30,000. Stella is planning on returning to work six months after having the child. They want to
look at an insurance program that will address both their short-term and long-term needs.
From the information provided above, which of the following BEST analyzes Andrew
s
disability insurance needs?
A ) An individual disability policy that covers both total and residual disability with a cost of
living rider.
B ) An individual disability policy that covers both total and partial disability
C ) An accident only individual disability policy
D ) Andrew does not require disability insurance
Question 77.) Yves Cornier and his wife Giselle work for different employers. Yves
s benefit
plan provides Extended Health Care and Dental coverage at 80-20% co-insurance on all benefits
with a $100 deductible. Giselle
s benefit plan provides Extended Health and Dental coverage
with 90-10% co-insurance on all benefits. Giselle
s extended Health and Dental coverage has
$50 deductible. They both have family coverage with their employees. Neither Yves nor Giselle
have made a claim yet this year.
Yves incurs a semi-private hospital bill for $4,500 in excess of the ward coverage provided
by the provincial medi-care plan.
How much will Yves insurer be required to pay?
A)
B)
C)
D)
$3,520
$3,600
$3,960
$4,050
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Question 78.) Yves Cornier and his wife Giselle work for different employers. Yves
s benefit
plan provides Extended Health Care and Dental coverage at 80-20% co-insurance on all benefits
with a $100 deductible. Giselle
s benefit plan provides Extended Health and Dental coverage
with 90-10% co-insurance on all benefits. Giselle
s extended Health and Dental coverage has
$50 deductible. They both have family coverage with their employees. Neither Yves nor Giselle
have made a claim yet this year.
Giselle has an eligible dental claim in the amount of $2,000, which she submits to her
carrier. Giselle
s plan pays per the contract and the remainder is remitted to Yves insurer?
How much will Yves insurer have to pay?
A ) $116.00
B ) $196.00
C ) $1440.00
D ) $1520.00
Question 79.) Glen Gaudet is 50 years of age and married to his wife Lisa who is 47. They do not
have any children. They have been very committed to contributing to their Registered Retirement
Savings Plans over the past 20 years. Their home is mortgage free. They would like to purchase
some life insurance that will allow them to have it paid up in 20 years as well as have some
savings that they could perhaps access to help supplement their retirement income. The Gaudet
s
have taken a very balanced approach in their Registered Retirement Savings Plan therefore they
believe that they could be a little more aggressive in their approach to their life insurance policy.
They have agreed with their agent
s recommendation for purchasing a universal life insurance
policy with guaranteed level cost of mortality and guaranteed administration expenses.
Which of the following strategies would be the BEST for the Guadets?
A ) A policy with a guaranteed term account for the fixed expenses of the contract and with a
diversified portfolio of indexed accounts for any additional deposits
B ) A policy with 100% of the investments in a balanced account
C ) A policy with 50% of the investments in a balanced account and 50% in an index of a Far
East account
D ) A policy with 25% of the investments in a balanced account, 25% in a global allocation
account, 25% in a Far East account and 25% in a money market account
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Question 80.) Michael and Bernice Bussey are husband and wife. He is 38. She is 32. She is a
public school teacher earning $50,000 per year, having started teaching at age 25. He is a selfemployed electrician earning $40,000 per year. She has a full employee benefit package
including a defines benefit pension plan indexed to the Consumer Price Index. They do not have
children yet, but they are planning to.
What is the maximum Michael can contribute annually to his Registered Retirement
Savings Plan?
A ) $6,500
B ) $7,200
C ) $16,500
D ) $18,000
Question 81.) A client applies for a life insurance policy. He purposely leaves out information
concerning his mental health. He does not want you to know he was seeing a psychiatrist and that
he had been taking medication for a Mood Disorder. The underwriter requests an Attending
Physician
s Statement from his family physician. His family physician completes the Attending
Physician
s Statement and says that the client was referred to a specialist. What is the most likely
thing the underwriter would do in this case?
The underwriter would:
A ) Decline the client for life insurance
B ) Request more information
C ) Postpone the approval of the life insurance application and tells you to request the medical
findings to be forwarded to his family physician.
D ) Approve the policy with a rating.
Question 82.) Donald Miller is 67 years of age and has just been diagnosed with inoperable
cancer. His life expectancy is 1.5 years. Donald has contacted his life insurance agent to help him
get his affairs in order. Donald is a widower but does have a handicapped dependent daughter
that will continue to need financial support. With the ever-increasing cost of providing long term
care for his daughter Donald wants to be certain that there is sufficient money to care for her. The
annual cost of long-term care for his daughter is $85,000. Donald projects an annual increase in
the fees for long-term care to be 4% per year. Her life expectancy is 11 years. Donald has a life
insurance policy in the amount of $1,000,000; a home that is valued at $235,000 that is mortgage
free, and savings of $87,000.
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Using the life expectancy of 11 years for his daughter, a 4% increase per year in fees for
long-term care, providing $15,000 for final expenses, and without taking into consideration
any final taxes due on his death or interest that could be earned, how much money will be
left in Donald
s estate to leave to his church?
A ) $123,987
B ) $126,749
C ) $132,509
D ) $160,664
Question 83.) Reginald Wotherspoon is a 40 year old construction foreman with a local builder.
He purchased a non-cancellable individual disability insurance policy several years ago on the
advice of his agent. In the sales process, and again on delivery of his policy, Reginald
s agent
explained that the policy includes a 100% offset for Workers Compensation and Canada Pension
Plan payments. While working, Reginald fell and severely injured his back.
Reginald returns to work and, at the age of 42, quits the construction business and buys a
donut franchise. He is the sole proprietor. He decides to keep his disability policy. The
business turns out to be very profitable, and Reginald
s net income increase substantially to
$200,000 per year. At the age of 45, Reginald decides to purchase more disability insurance.
His current individual disability policy has a short elimination period, includes only basic
coverage and has no future increase options.
The BEST advice an agent could give to Reginald would be to:
A ) Retain the current policy and apply for a new policy with future increase options.
B ) Purchase a new policy and lengthen the elimination period on the old policy.
C ) Replace the old policy with a larger new policy
D ) Replace the old policy with a larger new policy with a longer elimination period.
Question 84.) Reginald Wotherspoon is a 40 year old construction foreman with a local builder.
He purchased a non-cancellable individual disability insurance policy several years ago on the
advice of his agent. In the sales process, and again on delivery of his policy, Reginald
s agent
explained that the policy includes a 100% offset for Workers Compensation and Canada Pension
Plan payments. While working, Reginald fell and severely injured his back.
Reginald returns to work and, at the age of 42, quits the construction business and buys a
donut franchise. He is the sole proprietor. He decides to keep his disability policy. The
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business turns out to be very profitable, and Reginald

s net income increase substantially to
$200,000 per year. At the age of 45, Reginald decides to purchase more disability insurance.
His current individual disability policy has a short elimination period, includes only basic
coverage and has no future increase options.
When structuring his coverage, the agent should advise Reginald to:
A ) Form a wage loss replacement plan
B ) Deduct the premiums as a business expense
C ) Pay for the premium using after-tax dollars
D ) None of the above.
Question 85) Mrs. Jones was concerned about running out of income. She also did not like to
have to think about renewing investments. After much discussion you and she determine an
annuity will resolve her concerns. She purchases a single life annuity with a ten-year guarantee.
Mrs. Jones dies five years later. Her children are wondering what happened to her funds. You
explain the annuity and how a ten year guarantee period impacts the residual balance due to her
beneficiaries. They are furious. They want to sue. They claim Mrs. Jones was old and frail and
did not know what she was doing. Mrs. Joneschildren claim she told them that the principal
amount of her investment would be returned to her estate if she died in the first 10 years.
Which of the following should you contact first?
A ) Your lawyer
B ) The insurer
C ) Your errors and omissions insurer
D ) Your association
Question 86.) Use the following [Options] to answer this question:
[Option 1] Underwriting Information
[Option 2] Declarations and Agreements
[Option 3] Agent
s Comments
[Option 4] Insured
s References
A life insurance application consists of the following sections:
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A ) Option 1 and 4
B ) Option 1 and 2
C ) Option 1, 2 and 3
D ) Option 1, 2, 3 and 4
Question 87.) Claude Sutherland is employed by The Coastal health clinic. His employer offers a
comprehensive employee benefits package which includes life insurance, short and long- term
disability insurance, major medical and an employee assistance programme. Claude asks you to
provide him with some information about his group life insurance.
You advise Claude that the certificate holder in the contract is:
A ) the employer
B ) the employee
C ) the insurer
D ) the provincial government
Question 88.) Which of the following statements is NOT TRUE of whole life insurance:
A ) Provides a level premium throughout the life of the contract
B ) Cash surrender value is guaranteed and stated in the policy contract
C ) Cash surrender value is available to the policyholder as a loan during the policy
s lifetime
D ) Whole life policies do not have any non-forfeiture values
Question 89.) Curtis Speight purchased an IVIC on his 48th birthday in the amount of $200,000.
Curtis
s wife Ann is the named beneficiary on his contract. This policy contract contains a 10year maturity guarantee and a 100% death benefit guarantee. This policy also contains reset
options that are exercisable 2 times per year. Curtis has only exercised one reset option and this
was on his 52nd birthday with a value of $234,000.
If Curtis had decided to cash in his IVIC to provide capital one year ago on his 61st
birthday, when the market value was $213,450, how much would he have received when he
surrendered the policy contract?
A ) $200,000
B ) $202,000
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C ) $213,450
D ) $234,000
Question 90.) Curtis Speight purchased an IVIC on his 48th birthday in the amount of $200,000.
Curtis
s wife Ann is the named beneficiary on his contract. This policy contract contains a 10year maturity guarantee and a 100% death benefit guarantee. This policy also contains reset
options that are exercisable 2 times per year. Curtis has only exercised one reset option and this
was on his 52nd birthday with a value of $234,000.
Unfortunately, Curtis died yesterday at age 62. The market value of his contract at his
death $202,000. Curtis had outstanding debts with the bank in the amount of $246,750.
The value that Ann would receive from this policy contract after probate fees would be?
A ) $0
B ) $200,000
C ) $202,000
D ) $234,000
Question 91.) Roman Meyer was born on October 17, 1958. His wife Arabella was born on
December 1, 1955. They work for different employers. Roman
s benefits plan provides Extended
Health Care at 90% co-insurance with a deductible of $25 single and $50 family.Arabella
s
benefits plan provides health coverage with 60% co-insurance and no deductible. They have both
selected family coverage with their respective employers. The Meyer
s have two children, a
daughter bobby born in June, and a son James born in March 2000. Due to a severe viral
infection, the children incur eligible medical expense of $5,325.
Which of the following answers correctly reflects how the insurers would coordinate their
payments to the Meyers?
A ) Arabella
s plan would pay $3,195. Roman
s plan would pay $2,080.
B ) Only Roman
s plan would pay for any portion of the claim
C ) Roman
s plan would pay the first $4,747.50. Arabella
s plan would pay $346.50.
D ) Arabella
s plan would pay $3,195. Roman
s plan would pay the remaining $2,130
Question 92.) Which of the following limitations or exclusions appear under both employeragreement group Accident and Sickness plans and under individual Non Cancellable
Policies?
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A ) Criminal offence exclusion

B ) All source maximum
C ) Acts of war
D ) Right of subrogation
Question 93.) upon receipt of a completed life insurance application, the underwriting
department first checks:
A ) The attending physician
s statement
B ) The information disclosed on the application
C ) The motor vehicle bureau report
D ) The medical information bureau notice
Question 94.) in comparing Individual Variable Insurance Contracts and mutual funds,
which of the following statement is NOT ACCURATE?
A ) Mutual funds are usually set up as trusts
B ) Mutual funds are owned by the shareholders
C ) The market value of Individual Variable Insurance Contracts are guaranteed by Assuris
D ) Individual Variable Insurance Contracts can be made creditor proof
Question 95.) Why are Administrative Services Only contracts usually NOT recommended
for smaller companies?
A ) Higher risk to corporate cash flow
B ) Insurer keeps surplus
C ) Prospective claims are adjusted for inflation
D ) A and C
Question 96.) Which of the following is NOT a typical component of an extended health
plan?
A ) Hospitalization
B ) Paramedical Services
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C ) A prescribed fitness club membership

D ) Emergency out-of-province medical expenses
Question 97.) Life insurance premiums are deductible from personal income tax if:
A ) The term policy is registered as Registered Retirement Income Fund
B ) If they are considered the net cost of insurance and the policy is written requirement of a
financial institution to approve a business loan.
C ) The policy will be used to cover taxes due at death
D) A& C
Question 98.) Robert Crandall is the sole shareholder of a large textiles manufacturing company.
He has a top-notch executive group consisting of a president, a chief financial officer and sales
vice president. Rather than giving these employees ownership in the company, he would like to
give each person improved benefits, including insurance to complement their long-standing
bonus plan. Mr. Crandall decides to establish an executive disability program.
The MOST APPROPRIATE structure would be to:
A ) Establish a wage loss replacement plan.
B ) Give each executive the cash to buy their own disability insurance.
C ) Raise their group long term disability to 100% salary
Question 99.) Robert Crandall is the sole shareholder of a large textiles manufacturing company.
He has a top-notch executive group consisting of a president, a chief financial officer and sales
vice president. Rather than giving these employees ownership in the company, he would like to
give each person improved benefits, including insurance to complement their long-standing
bonus plan. Mr. Crandall decides to establish an executive disability program.
When establishing disability benefit levels, the executive disability plan should take into
account:
A ) Current salary
B ) Current salary and bonus
C ) Expected salary and bonus
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D ) Current salary and expected salary

Question 100.) Eleanor Jacobs is a young executive with a major financial institution earning $45,
000 annually. She is young and single and purchased a single family dwelling last year. She used
all of her savings as a down payment and has no registered retirement savings plans. She has
heard about the concept of leveraging the net asset value of her home for investment purposes.
She would like to take out a loan using the equity she has built up in her home to purchase an
equity linked individual variable insurance contract
During your meeting with her, the first and MOST important thing you need to do is to
explain:
A) The variety of equity-linked funds in which she could invest.
B) The impact of a negative return on an individual variable insurance contract, the
impact of a disability on her financial plan, the necessity to plan for retirement and to
contribute to a retirement plan, and the impact of her death on her family should she
die with debt outstanding and no liquid assets.
C) The advantages of setting up an annual contribution to a registered retirement savings
plan with 100% invested in a foreign equity investment fund.
D) What would be required to set up the leveraging loan through a bank.
Question 101.) The Temporary Insurance agreement is:
A) Part of the financial report.
B) Part of the policy contract.
C) A separate contract enforceable during the underwriting period, for not longer than the
period specified on the Temporary Insurance Agreement, if certain conditions are met.
D) A separate contract enforceable during the underwriting period, for an undeterminable
number of days, if certain conditions are met.
Question 102.) Victor Hayden purchased an individual guaranteed renewable disability insurance
policy 6 years ago while he was employed in a manufacturing firm. 3 years ago Victor decided
that he wanted to be able to earn more income so he changed his occupation and now works in
the construction industry installing steel beams in high-rise buildings. Yesterday Victor took a
serious fall and was severely injured. It is expected that he will never be able to return to work.
When the claim forms are submitted to the insurance company, which of the provisions
generated included in an individual disability insurance policy will impact the payment of
his claim?
A) Physical examination
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B) Pre-existing condition
C) Change of occupation
D) Over insurance
Question 103.) Which of the following investment vehicles is/are sold only by insurance
companies?
A)
B)
C)
D)
Registered retirement Income funds.

Individual Variable Insurance Contracts.
Equity-linked Guaranteed Investment Certificates.
All of the above.
Question 104.) Sangeeta is an employee of a small but successful computer consulting company.
She has worked at the company for 8 years and has seen the company continue to grow. The
amount of her group long term disability benefits makes her ineligible to purchase any additional
individual disability insurance. In a fact-finding meeting, an insurance agent discovers that she is
54 years old, was discovered 10 years earlier, she is very risk averse and is concerned about whol
will help her as she ages. She has no plans to remarry and has no family in Canada. She has
excellent cash flow.
Sangeeta decided to purchase an individual critical illness policy. 59 days after the policy
was issued, she was diagnosed with a life threatening cancer. Which of the following
statement(s) is MOST CORRECT?
A)
B)
C)
D)
She would
She would
She would
She would
receive the face amount if she survives an additional 30 days

not receive the face amount
Question 105.) Sangeeta is an employee of a small but successful computer consulting company.
She has worked at the company for 8 years and has seen the company continue to grow. The
amount of her group long term disability benefits makes her ineligible to purchase any additional
individual disability insurance. In a fact-finding meeting, an insurance agent discovers that she is
54 years old, was discovered 10 years earlier, she is very risk averse and is concerned about who
will help her as she ages. She has no plans to remarry and has no family in Canada. She has
excellent cash flow.
The agent should recommend which the following:
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A)
B)
C)
D)
Opt out of the group long term disability.

Opt out of the group long term disability and purchase an individual critical illness policy
Opt out of the group long term disability and purchase an individual long term care policy.
Purchase an individual critical illness policy.
Question 106.) Rodney age 46 and rose age 45 are a married couple with 2 married children.
They need to purchase some insurance and they have heard about universal life. The purpose for
this policy was to address any capital gains that arose from their vacation cottage on their deaths.
They have contacted a life insurance agent and told her that they want to buy a universal life
insurance policy similar to one that their friends purchased. The policy that their friends
purchased had a level death benefit, adjustable mortality costs and they had chosen their
investments to be in a Far East Fund. Rodney and Rose really do not understand the investment
market and will have to rely entirely on the agent
s recommendations.
This of the following statements/s indicates why this policy is NOT the BEST policy for
their needs
A) A universal life policy is a high maintenance policy that requires a great deal of attention
B) The mortality costs in this contract are not guaranteed
C) A level death benefit universal life policy will not keep pace with the increasing value of
their vacation cottage
D) All of the above
Question 107.) Reg Comeau has been employed for 18 years at a mid-sized manufacturing plant
that has a defined benefit pension plan for its employees. Reg started his employment with the
company on the assembly line when he was 43. After seven years, through his diligence and hard
work, he became foreman and eventually, vice president of manufacturing. Reg know that when
he retires at 65 he will receive a monthly pension from the company. He also has a registered
retirement savings plan. Reg and his wife Renee have been discussing his upcoming retirement.
Which of the following statements is/are TRUE in regards to his income options on
retirement?
A) Reg will receive a pension from the company at retirement that is based on a set formula.
B) Reg must convert his Registered Retirement Savings Plan and receive an income when he
retires at age 65.
C) Reg must convert his Registered Retirement Savings Plan and receive an income before
he turns 70
D) Reg will receive the monies that he contributed to his pension plan when employed by his
employer
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Question 108.) Wendy Almay works for an employer that provides her with an employee benefit
plan. This plan provides for basic dental plan. Wendy has been to see her dentist and requires
some dental work.
Which of the following services that Wendy needs would NOT be covered by her basic
dental plan?
A)
B)
C)
D)
Cleaning and scaling

Extractions
Fillings
Crowns
Question 109.) Which of the following statement(s) is/are FALSE?

A)
B)
C)
D)
Mutual funds can pass probate free.

Guaranteed Investment Certificates are guaranteed by Canada Deposit Insurance Corporation.
Individual Variable Insurance Contracts are guaranteed by Assuris.
B and C.
Question 110.) Which of the following statements is/are accurate?

A) A non-cancellable disability policy can never be cancelled expect in the case of
misrepresentation or fraud.
B) A guaranteed renewable disability policy can never be cancelled expect in the case of the
misrepresentation or fraud.
C) A cancellable disability policy has fully guaranteed premiums.
D) A and B.
Question 111.) Norella Cain is a 34 year old widow with 2 small children, ages 3 and 5. Norella
s
husband died 2 years ago without any insurance in force. This has left Norella in a different
situation. She works full time as a marketing representative for a major pharmaceutical company.
While she makes reasonably good money, $60,000 per year, she has daycare expenses benefit
package. She knows that she needs to provide for her children if something were happen to her.
Norella knows that she needs at least $500,000 of insurance. She wants to purchase a $100,000
term to 100 policy. She is concerned about her boys as well. Their father died of a heart attack at
the age of 35.
Which of the following strategies will BEST help Norella address her concerns?
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A ) A $100,000 term to 100 policy on Norella

s life, a $400,000 10 year renewable and
convertible term rider, and a children
s term rider.
B ) A $500,000 term to 100 policy on Norella
s life, and a $100,000 whole life non par policy on
each of the 2 children
C ) A $250,000 minimum funded universal life policy with $50,000 policies on each of the 2
children added as additional insured
s under the universal life policy
D ) $250,000 whole life non par policy on Norella
s life, $100,000 universal life policies on each
of the children
Question 112.) Joe Palma is a single 45 year old male who is a business owner. He provides an
employee group benefit programme for his 25 employees that includes 1 times salary for life
insurance, major medical and dental. He is getting his affairs in order prior to taking a reduced
role in the running of his company.
What additional insurance needs would you recommend that Joe consider?
A ) Life insurance
B ) Disability insurance
C ) Critical illness insurance
D ) All of the above
Question 113.) Pension Adjustment is calculated on the following basis:
A ) Amount of Canada Pension Plan contribution
B ) Amount of last year
s RRSP contribution
C ) Contribution of the employer to a defined contribution pension
D ) Contribution of the employer and the employee to a defined contribution pension
Question 114.) Mike and Lucy Weatherby are young married couple with 2 children. Mike is 26
and Lucy is 29. Their children are 3 and 5. Lucy has taken a leave from her job to stay at home
with her children until they are both in school full time. Things are a little tight financially for
this young couple. Mike has an employee benefit plan that provides life insurance of one-time
earnings on his life and $25,000 on Lucy
s life. They are aware that if something was to happen
to Lucy, there would be considerable expense in providing daycare so that Mike could continue
to earn an income.
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Which of the following products would be the LEAST APPROPRIATE product to cover
this need?
A ) Joint first to die T-10 renewable and convertible policy
B ) Joint first to die T-5 renewable and convertible policy
C ) Joint last to die t-20 renewable and convertible policy
D ) Two individual T-20 renewable and convertible policies.
Question 115.) Roger and Anita are partners in a thriving dental practice. They are both nonsmokers and are in excellent health. Anita started the practice 5 years earlier and brought Roger
in as a new graduate from dental school. Recently, Roger and Anita re-arranged their affairs into
a partnership with each owning 50%. Each is also responsible for 50% of the expenses. The
practice is valued at $1,000,000 and has annual expenses of $60,000. Anita would like to
purchase more individual disability insurance. Her dental association offers disability insurance.
Based on the information shown above, which of the following would BEST cover their
insurance needs?
A ) $500,000 of disability buy-sell and $2,500 per month of overhead expense insurance
B ) $1,000,000 of disability buy-sell and $2,500 per month of overhead expense insurance
C ) $500,000 of disability buy-sell and $5,000 per month of overhead expense insurance
D ) $500,000 of disability buy-sell and no overhead expense insurance
Question 116.) Roger and Anita are partners in a thriving dental practice. They are both nonsmokers and are in excellent health. Anita started the practice 5 years earlier and brought Roger
in as a new graduate from dental school. Recently, Roger and Anita re-arranged their affairs into
a partnership with each owning 50%. Each is also responsible for 50% of the expenses. The
practice is valued at $1,000,000 and has annual expenses of $60,000. Anita would like to
purchase more individual disability insurance. Her dental association offers disability insurance.
Roger has a $1,000,000 trust fund that generates $5,000 per month of unearned income.
What impact will this have on roger
s eligibility when purchasing an individual disability
policy?
A ) None
B ) Increase the issue amount of monthly benefit by $5,000 per month
C ) Decrease the issue amount of monthly benefit
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D ) Increase the issue amount of monthly benefit by $2,500 per month

Question 117.) Anwar, a bachelor age 52 and an accountant with a small general insurance
company, requires $120,000 of life insurance coverage on his own life, to provide for the capital
gains liability on his cottage property at the time of his death. He plans to leave the cottage to his
nephew, Alok, and wishes to ensure that ALok gets the cottage free of any encumbrances or
expenses. Anwar expects the cottage (and the associated capital gains tax liability) to continue to
grow in value over the years and needs an insurance solution that will keep pace. Anwar plans to
retire in the near future and spend his time as
walkerin the Lakes District of England
, so he
does not want an insurance solution that will require active management. He would prefer a
reasonably low-cost option that he can fund at a pre-determined premium level and only have to
review once every five years or so.
Which of the following combinations of universal life insurance death benefits and
mortality rate deduction options would be MOST suitable in Anwar
s circumstances?
A ) Level death benefit, with a guaranteed yearly renewable term mortality deduction
B ) Level death benefit plus accumulated deposits, with a guaranteed yearly renewable term
deduction
C ) Level death benefit plus account value, with a guaranteed yearly renewable term mortality
deduction
D ) Level death benefit plus account value, with a guaranteed term to 100 (level)mortality
deduction
Question 118.) George McCullock has asked a new life insurance agent to meet with him and to
review his current universal life insurance policy. George purchased this policy 18 years ago and
does not really understand the policy. George is a conservative investor so he chose a 5-year term
account investment option in the contract. The agent reviews the universal life policy and
discovers that during the first 15 years of the policy, the cash accumulation in the policy was
increasing but over the past 3 years the cash accumulation has begun to decrease.
Which of the following could be the cause of the decrease in cash accumulation in the policy?
A ) the policy owner chose a yearly renewable term cost of increase mortality option
B ) the policy owner chose a term to 100 cost of insurance mortality option
C ) The policy owner is maximum funding the policy contract
D ) The rate of the return on cash accumulation portion of the contract has increased
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Question 119.) Emmanuel St. Angeline has committed to providing financial support t his niece,
so that she might have a private education in a bilingual school. His niece is 5 years old and has
shown a higher than average aptitude for languages. Emmanuel
s commitment is $12,000 per
year for the next 10 years. Emmanuel has no debt and maximizes his RRSP. He lives in a condo
downtown and has no dependents of his own. He has full coverage for short term disability, long
term disability, Critical illness, Medical and dental through his employer. He has prepaid all of
his funeral expenses.
Which of the following products would enable him to keep this commitment, should he die
prematurely?
A ) RRSP
B ) RESP
C ) IVIC
D ) 10 year R & C life insurance policy
Question 120.) Which of the following statement(s) is/are FALSE about types of funds?
A ) Growth funds are generally less volatile than income funds
B ) Real estate funds may not borrow money to make purchase of assets
C)A& B
Question 121.) The ABC Company has a 10 year R & C key person life insurance policy on Mr.
Edward Lane, who is the CEO of this family owned business. The policy had been issued as a
non-smoker 10 years ago. Five years ago he started smoking. The office has recently moved, and
the CEO
s secretary is new. A premium billing notice was sent to the company
s old address. By
the time it was redirected to the new office, the premium was 30 days overdue. Since the
premium was due a month ago, the secretary was not sure what to do with the notice. For the
next two weeks the CEO was traveling out of the country on vacation, and the premium payment
was never processed.
At this point in time, which of the following standard policy limitations and provisions are
impacted by the situation outlined above?
A ) Grace period
B ) Suicide and incontestability
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C ) Reinstatement
D) A& B
Question 122.) Under which of the following situations would an insured be considered
disabled under the presumptive disability clause?
A ) The loss of one hand and one foot
B ) The total loss of hearing
C ) The total loss of sight
D ) A, B and C
Question 123.) Which of the following statements is TRUE of Guaranteed Investment
Certificate?
A ) Guaranteed Investment Certificate offer only guaranteed rates of interest
B ) Guaranteed Investment Certificate are redeemable on demand without penalty
C ) Guaranteed Investment Certificate cannot be protected from creditors.
Question 124.) When meeting with you client, Nathan Adams, he asks you to provide him
with some information about his group life insurance. You advise him that the policy
holder in the contract is:
A ) The employee
B ) The employer
C ) The insurer
D ) The provincial government
Question 125.) Newlyweds, Doug and Cathy Brown, have been referred to you by the bride
s
father, one of your clients. Cathy is a 29 year-old head cashier, earning $32,000 per year. Doug is
a 33 year old electrician with income of $44,000 a year. They have $18,000 in a bonus savings
account, $15,000 in Canada Savings Bond, and no debts. They currently own a condo that is
mortgage free, and their goal is to buy a house within the next year. They will use the proceeds
from the sale of the condominium and their savings as a down payment for their new home.
During extensive discussion, they indicate they have the habit of saving a portion of their income.
Page 5 of 5
What would be the LEAST effective way for them to continue their savings over the next
year to achieve their goal of buying a home?
A ) Invest in a foreign equity account
B ) Invest in a registered asset allocation IVIC with a deferred sales charge
C ) Invest in a diversified portfolio
D ) Maintain current investment strategy
Question 126.) Jason Wilson invested in a deferred annuity contract 20 months ago. His initial
deposit was $50,000 for a 3-year term at 5.0%. the contract allowed for early redemption after 2
years with a market value adjustment. Current interest rates, for a similar investment, have risen
to 7%.
Jason is getting married and needs access to $35,000 for a down payment for a new home.
How can Jason get access to these funds from his deferred annuity contract?
A ) Jason cannot access these funds at this time
B ) Jason can exercise his withdrawal right from $35,000 and continue to earn 5% on the balance
C ) Jason can exercise his withdrawal right from $35,000 with a market value adjustment and
leave the balance for the 16 months remaining in the contract at 5%
D ) Jason can exercise his withdrawal right from $35,000 with a market value adjustment and
leave the balance for the 16 months remaining in the contract at 7%
Question 27.) Amber Brennan is a Registered Massage Therapist who owns a large clinic that
specializes in offering medical services. The clinic has been operating for 3 years and is very
successful. Amber has been talking to her life insurance agent about purchasing some individual
disability insurance. Amber has already made the decision to purchase a non-cancellable policy
and she is now talking about additional benefits that she should consider purchasing with the
policy. Amber
s income is expected to continue to grow substantially. Amber is 45, single and
doesn
t expect that she will ever get married.
Which of the following additional benefits should Amber consider adding to her noncancellable disability policy?
A ) Future purchase option
B ) Cost of living adjustment (COLA)
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C)A& B
Question 128.) After years of struggling to make his business a success, Mr. Pedantic has
reached the financial ability to provide his 20 employees with an employee benefits program. His
agent explains that insurance carriers use different approaches to pricing the various benefits
available. There is a relationship among credibility, manual ratings, experience ratings and
blended ratings.
Which of the following is/are correct?
A ) Experience rating is pricing of a group plan that reflects the actual claims and expenses
incurred by a carrier for a specific employer
B ) Credibility is the determination of how much the carrier believes the client
s own claims
experience will be reflective of future claims
C ) Blended rating is when a carrier uses partial experience rating, partial manual rating and
blends the two to establish a premium
D ) A, B and C.
Question 129.) James Young is an employee of a large auto parts distribution firm. He is their top
salesperson. He is about to turn 40. His employer wants to do something to show his appreciation
for James and thereby ensure that he will remain with the firm. This is a small firm that does not
have an employee benefits package in place. The employer decided that he will provide an
individual disability policy for James.
Use the following [Options] to answer this question:
[Option 1] The employer directly pays the premiums for the individual policy and
deducts the premiums as a business expense.
[Option 2] The employer increases Jamesincome in an amount equal to the annual
premium and James pays the annual premium himself
[Option 3] The employer increases Jamesincome in an amount equal to the annual
premium plus 50% to cover any taxes and James pays the premium himself
[Option 4] The employer directly pays the premium for the individual policy and any
disability benefits will be paid to the employer who will then pass them on to James
Which of the methods would allow James to receive disability benefits on a tax exempt
basis?
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A ) Option 1 and/or 4
B ) Option 2 and/or 3
C ) Option 2 and/or 4
D ) Option 3 and/or 4
Question 130.) Under a typical accidental death and dismemberment benefit provided by
an employee benefit plan, what is the maximum period of time that a death must occur
after an accident for the benefit to be paid to the designated beneficiary?
A ) 60 days
B ) 90 days
C ) 180 days
D ) 365 days
Question 131.) Which of the following statements related to Non-Refund Accounting is
TRUE?
A ) Surplus are refunded to the client-company
B ) Deficits are not carried forward
C ) Claims Fluctuation Reserves are not required
D) A& C
Question 132.) Which of the following funds is NOT a generic fund type:
A ) Labour sponsored fund
B ) Balanced fund
C ) Fixed income fund
D ) Common stock growth fund
Question 133.) Which of the following statements is TRUE?
A) All IVIC attract deferred sales charge
B) A deferred sales charge is most suitable for short-term investment
C) Front-end sales charge IVIC can be redeemed without penalties
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D) All IVIC attract front-end sales charge

Question 134.) Gwen Williams had a whole life policy with a face value of $75,000, a cash
surrender value of $38,860 and an adjusted cost basis of $21,654. Her annual premium for her
policy was $3,655. She paid her annual premium on March 10, 2002. On March 13, 2003 Gwen
died in a car accident, and her premium for 2003 had not been paid.
What will Gwen
s beneficiary receive as the proceeds from the whole life policy?
A ) $71,345
B ) $0
C ) $96,654
D ) $113,360
Question 135.) Jerry Montgomery is 45 years of age and is engaged to be married. He has a $200,
000 home, mortgage free. It is his intention that fiance should be able to live in the family home
should he die. He has a stock portfolio with a calculated taxable capital gain of $300,000. He has
a $500,000 RRSP. He has invested in a corporation and this investment has developed a taxable
gain of $250,000. He also has $150,000 in a joint with right of survivor savings account which
his fiance will keep.
Which of the following assets will be subject to tax at his death?
A ) Stocks, RRSP, and value of shares owned in the corporation
B ) RRSP, stocks, and cash
C ) Stocks and value of shares in the corporation
D ) Home, stocks, cash, RRSP and corporation
Question 136.) Which of the following statements is TRUE?
A ) A universal life policy does not offer guaranteed performance features
B ) RRSP funds can be used as a source of money for a first-time homebuyer
C ) Interest earned on a Bonus Savings account is taxed as dividends from a Canadian
corporation
D ) Earnings from a balanced portfolio are all treated as capital gain, for income tax purposes
Question 137.) Roger Gomez owns a universal life insurance contract. When he purchased
Page 5 of 5
his policy 5 years ago, he chose an adjustable Yearly Renewable Term mortality costing
and his investment option was to be invest 100% in the NASDAQ and Japanese index funds.
He was paying close to minimum premium on an annual basis. His annual deposit was paid
six months ago. Since then, a large loss in the two indexes listed above would have which of
the following results:
A ) Higher net cost of insurance
B ) Additional premium requirement to cover the expenses of the policy
C ) Premiums increase due to insurance companiesinvestment losses
D ) Triggering of an Automatic Premium Loan
Question 138.) In comparing Individual Variable Insurance Contracts and mutual funds,
which of the following statements is TRUE?
A ) Individual Variable Insurance Contracts can be established in nominee name
B ) Mutual funds are guaranteed by the Canada Deposit Insurance Corporation
C ) Individual Variable Insurance Contracts are regulated by the securities regulators
D ) Mutual funds may qualify as RRSP investments
Question 139.) Which of the following statements is/are TRUE about group insurance?
A ) The insured can designate an irrevocable beneficiary
B ) Life insurance proceeds under a group policy can be assigned to a bank
C ) An individual can choose any amount of insurance that they want to purchase
D ) A group policy usually specifies a specific amount of insurance that may be purchased
without evidence of insurability
Question 140.) Susan Delahunt purchased an individual non-cancellable disability insurance
policy 5 years ago that is paid annually. Susan is employed as a senior manager at her company.
The employer does not provide any employee group benefits. Susan has been employed with this
company for 25 years. She has decided that she wants to take an extended vacation at her cottage
in northern Quebec. Almost all of her bills are on automatic monthly withdrawal from her bank
account. While she is on her vacation, he
s annual premium notice for her disability policy
arrives. Susan has forgotten that this premium is due during her absence. Twenty-seven days
after the premium is due, Susan is involved in a car accident which leaves her as a paraplegic.
What will happen when Susan makes a claim to her insurance company?
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A) The annual premium will have to be paid and then insurance company will begin to pay
the monthly disability benefit
B) The company will deny the claim because the premium was not paid
C) The policy premium will have to be paid, but this could be paid monthly, until the
waiting period has been met, and then the insurance company will begin to pay monthly
disability benefits.
D) The policy will need to be reinstated and the annual premium paid
THE END
Page 5 of 5

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MOCK EXAM

C ) A guaranteed investment certificate would allow Joy to do an early withdrawal without a

Which of the following statement/s are TRUE?

Primary Offsetprovision applies.

Primary Offsetprovision applies.

B ) Explain the consequences of non-disclosure to Craig.

C ) Top up both George

Question 26.) Keith Totten

They have a family cottage left to them from Jeremy

C ) Joint and survivor 60% continuance.

D ) 10 year renewable and convertible term insurance

D ) When the dividends are paid.

C ) Joint first-to-die Term to 100 on both lives.

Guaranteed Cash Values

Renewable Term has a lower cost of insurance in the early years.

Question 70.) Common sense

business turns out to be very profitable, and Reginald

A ) Criminal offence exclusion

C ) A prescribed fitness club membership

D ) Current salary and expected salary

Registered retirement Income funds.

receive the face amount if she survives an additional 30 days

Opt out of the group long term disability.

Cleaning and scaling

Question 109.) Which of the following statement(s) is/are FALSE?

Mutual funds can pass probate free.

Question 110.) Which of the following statements is/are accurate?

A ) A $100,000 term to 100 policy on Norella

D ) Increase the issue amount of monthly benefit by $2,500 per month

D) All IVIC attract front-end sales charge

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