- (Topic 3)
Mauro works full-time for a small company that offers no benefits. He earns $40,000 a year. He has an individual disability insurance policy that would provide him with $2,000 a month, for a maximum of two years, after a waiting period of four months. This policy includes a partial and residual disability rider. Injured in an accident, Mauro is completely unable to work for nine months. After that, Mauro??s doctor advises him to start working two days a week for the next three months, after which Mauro should be able to resume working full-time. What monthly benefit will Mauro receive during the period he works part- time?
Correct Answer:A
Comprehensive and Detailed Explanation:
A residual disability rider pays a proportionate benefit based on income loss. Mauro??s full income is $40,000/year ($3,333/month). Working 2/5 days (40%) earns $1,333/month ($3,333 ?? 0.40). Loss is $2,000/month ($3,333 - $1,333). The rider typically pays 80% of the loss up to the policy max ($2,000): $2,000 ?? 0.80 = $1,600 (Chapter 2:Insurance to Protect Income).
Option A: Correct; $1,600 fits residual calculation.
Option B-D: Incorrect; underestimates benefit.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 2:Insurance to Protect Income.
- (Topic 4)
President and sole shareholder of the Velos Tourisque company, Paul employs 50 people.
Maryse, his financial security advisor, advises him to have his company take out life insurance on him. Who will be the parties to the contract?
Correct Answer:D
Comprehensive and Detailed In-Depth Explanation: In a corporate-owned life insurance policy, the roles of policyholder, insured, and beneficiary must align with legal and insurable interest principles under the Civil Code of Quebec (Articles 2415–2419). The policyholder is the entity that owns and pays for the policy, the insured is the person whose life is covered, and the beneficiary receives the death benefit. Here, Velos Tourisque, the company, is taking out the policy on Paul, its key person, suggesting it will own the policy (policyholder) and benefit from the proceeds (beneficiary) to protect its financial interests—common in key person insurance. Paul, as the individual whose life is insured, is the insured. Option D correctly identifies Velos Tourisque as policyholder and beneficiary, with Paul as the insured. Option A misassigns Velos Tourisque as the insured (a company cannot be insured, only a person can). Option B incorrectlylists Velos Tourisque as the insured. Option C reverses the roles, making Paul the policyholder, which contradicts the company owning the policy. The Ethics and Professional Practice manual highlights advisors?? duty to clarify these roles for clients.
References: Civil Code of Quebec, Articles 2415–2419; Ethics and Professional Practice
(Civil Law) Manual, Section on Insurance Contract Parties.
- (Topic 5)
(Jerry, aged 63, is getting ready to retire. His pension statement shows contributions, investment choices, and performance data.
From among the following types of pension plans, which one was Jerry a member of?)
Correct Answer:C
The key feature of adefined contribution (DC) pension planis the focus on contributions and investment performance, rather than a guaranteed retirement benefit. Contribution amounts and investment options are fundamental characteristics of DC plans.
Exact Extract:
"In a Defined Contribution Pension Plan (DCPP), members?? benefits depend on the contributions made and the investment returns earned."
(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11 Group Plans)
- (Topic 2)
Josh is an established advisor who specializes in group benefits. He recently hired Bryan as a marketing manager. Bryan will be responsible for advertising and creating a social media platform for Josh's company. Among other things, Bryan is developing a monthly electronic newsletter, which he plans to email to potential and existing clients. However, because this is a brand new initiative, none of the would-be recipients has subscribed to the newsletter or asked to receive any such communication from Josh's company. What law should Josh and Bryan be mindful of before sending their newsletter?
Correct Answer:B
Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:
TheCanadian Anti-Spam Legislation (CASL)governs the sending of commercial electronic messages (CEMs), such as emails or newsletters, to recipients in Canada. According to CASL, businesses must obtain consent—either express or implied—before sending CEMs to individuals. Since Bryan??s newsletter is a new initiative and none of the recipients have subscribed or requested it, Josh and Bryan lack consent, making CASL the primary law they must comply with. TheIFSE Ethics and Professional Practice Course (Common Law)highlights CASL under ethical businesspractices, noting that non-compliance can result in significant penalties. The Personal Information Protection and Electronic Documents Act (PIPEDA) deals with the collection and use of personal information, not unsolicited messages specifically. The Privacy Act applies to federal government institutions, and the National Do Not Call List pertains to telemarketing calls, not emails. Thus, option B is correct.
References:
IFSE Ethics and Professional Practice Course (Common Law), Module 4: Regulatory Environment, Section on "Canadian Anti-Spam Legislation (CASL)."
- (Topic 3)
Josephine visits her dentist in downtown Victoria, BC, to have a cavity filled. The procedure costs her $550 but the maximum fee for a standard filling, according to the provincial dental schedule, is $400. Josephine works for a company that offers employees group dental coverage with a yearly maximum of $1,000 and an 80% co-insurance factor.
How much will Josephine receive from the insurer for her procedure?
Correct Answer:B
Josephine's group dental plan pays a percentage (80%) of theprovincial dental schedulefee, not the actual cost. For her filling, the schedule maximum is $400. Therefore, the insurer will cover 80% of $400, which amounts to $320. Although the procedure costs her $550, her coverage only applies to the schedule rate, meaning she will receive $320 from the insurer, while she covers the remainder out of pocket.