Free LLQP Exam Dumps

Question 56

- (Topic 5)
(Ted purchased an IVIC 10 years ago. His original deposit was $10,000. The current market value is $15,500 at maturity.
What will the new maturity guarantee be?)

A. $10,000, with the new maturity date set 10 years from now.
B. $11,625, and the new maturity date will depend on Ted??s age.
C. $12,000, with the new maturity date set 10 years from now.
D. $15,500, and the new maturity date will depend on Ted's age.

Correct Answer:D
Upon maturity,the new guarantee becomes the current market value, andthe new maturity date is based on contract terms, often depending on the ageof the client or a specific reset term.
Exact Extract:
"When a segregated fund contract matures, the new guarantee is based on the current market value, and a new maturity date is set according to the client??s age or the insurer??s terms."
(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.1.2 Growth Secured by Reset 45:0†Segfunds-E313-2020-12-7ED.pdf**)

Question 57

- (Topic 2)
Andre, an insurance agent, meets with his client Jasper to discuss his $150,000 whole life insurance policy. Jasper is deeply indebted and needs at least $40,000 to cover his debt. Andre tells him about a company he knows that will be willing to give him $75,000 if he assigns his policy to them. Did Andre act appropriately?

A. No, because Jasper is not allowed to assign his policy to an arms-length entity.
B. No, because trafficking in insurance is discouraged by the insurance industry.
C. Yes, because he is helping his client pay off his debt.
D. Yes, as long as this practice is not illegal in his province of residence.

Correct Answer:B
The practice of trafficking in insurance involves selling or assigning a life insurance policy to a third party, often at a discounted rate, which is typically discouraged within the insurance industry due to ethical concerns and potential misuse. The LLQP materials warn against such practices as they can be perceived as exploiting insurance contracts for profit, rather than for their intended purpose of providing financial security. Therefore, Andre acted inappropriately by suggesting this arrangement without considering the ethical implications.

Question 58

- (Topic 3)
Larry, an insurance agent, meets with Ethan, a freelance photographer, to review his insurance needs. Larry tells Ethan that he wants to collect all pertinent financial information to prepare a net worth statement for Ethan.
Why does Larry want to prepare Ethan??s net worth statement?

A. To have enough information to identify where Ethan spends his money.
B. To determine Ethan's various sources of income.
C. To determine how much Ethan can spend on accident and sickness insurance premiums.
D. To determine if Ethan has enough resources to cover medical expenses if he had a medical emergency.

Correct Answer:D
Anet worth statementassesses an individual??s total financial assets and liabilities, providing insight into their overall financial health. For Ethan, as a freelance photographer, understanding his net worth is essential to determine whether he has sufficient resources to manage unexpected expenses, such as medical costs from a potential emergency. This assessment helps Larry gauge Ethan's ability to withstand financial shocks, which is crucial when planning for accident and sickness insurance coverage. While cash flow statements provide details on income and expenses, net worth statements are specifically used to evaluate financial resources available for emergencies.

Question 59

- (Topic 5)
Owen meets with his insurance agent, Rachel, to review his investments. Owen is interested in segregated funds. In particular, he wants to know more about the reset feature.
What should Rachel tell Owen about resetting his funds?

A. All segregated funds offer a reset feature.
B. The reset feature may be automatic.
C. There is no additional cost for a fund that provides a reset feature.
D. The reset feature can be used if the market value increases or decreases.

Correct Answer:B
Rachel should inform Owen that some segregated funds offer an automatic reset feature, which adjusts the guaranteed value periodically based on the fund??s market performance. This can lock in gains during rising markets without requiring manual intervention. According to LLQP resources, automatic resets can occur on specific anniversaries or under certain conditions specified in the contract.
Option A is incorrect as not all segregated funds offer a reset feature. Option C is incorrect as there may be costs associated with funds that provide reset options. Option D is incorrect because resets typically lock in gains, not losses.

Question 60

- (Topic 3)
Ziad, aged 34, was an elementary school teacher for several years. However, staffing cutbacks and his love of food have prompted him to go into business. He just purchased a pizza franchise (taking a $150,000 personal loan to finance the venture) and entered into a five-year lease for his business. Ziad owns a 20-year term life insurance policy with a face amount of $250,000. He is also covered for some benefits under his wife??s group insurance plan, but knows he needs additional coverage. What type of accident and sickness coverage should Ziad purchase first?

A. Critical illness insurance.
B. Extended health insurance.
C. Creditor disability insurance.
D. Disability income protection insurance.

Correct Answer:C
Comprehensive and Detailed Explanation:
Creditor disability insurance ensures Ziad??s $150,000 loan payments if he??s disabled, protecting his primary financial obligation (Chapter 3:Insurance to Protect Assets). Option A: Secondary; lump-sum for illness.
Option B: Supplementary; not priority. Option C: Correct; loan protection first.
Option D: Important but secondary to loan.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 3:Insurance to Protect Assets.