- (Topic 3)
Group insurance and group annuity representative Zaheb recently sold a group insurance contract to Alumo Inc., a company that employs about 50 plant employees. This is the first time the company offers such a plan. The employees are asking the company questions about how the prescription drug plan works. They are especially surprised to see that the plan covers very few of the brand name drugs often prescribed by their physicians. What should Zaheb do?
Correct Answer:C
Comprehensive and Detailed Explanation:
Zaheb, as the agent, should educate employees via an information program to clarify coverage (e.g., generic vs. brand name drugs) (Chapter 8:Group Plan Specifics). Option A: Incorrect; Alumo lacks expertise.
Option B: Incorrect; MIB doesn??t explain plans. Option C: Correct; agent??s role.
Option D: Incorrect; insurer delegates to agent.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 8:Group Plan Specifics.
- (Topic 1)
Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem and only visits them sporadically. Vladimir's younger brother Sergei, on the other hand, is a dependable and helpful uncle who helps Svetlana regularly with the children. Svetlana meets with Robert, an insurance agent to review her life insurance needs because she wants to make sure that her children are taken care of if she were to die prematurely. Robert suggests that she purchase a $200,000 policy. Who should she name as a beneficiary?
Correct Answer:B
Since Svetlana's children are minors, naming them directly as beneficiaries would require appointing a trustee to manage the funds until they reach the age of majority. Given that Vladimir is unreliable,Sergei—who is dependable and supportive—is the most suitable choice to act as trustee. Naming him as trustee ensures that the funds are managed responsibly for thebenefit of Georgi and Ingrid until they can access them.Therefore,Option Bis the most appropriate choice.
- (Topic 3)
Xavier meets and fills out an application form with Jose, an insurance representative, because he would like to purchase a critical illness insurance policy. When Jose asks Xavier about his alcohol consumption, Xavier admits he regularly drinks 10 beers a day.
What is the next step in the application process?
Correct Answer:D
In the insurance application process, when an applicant discloses significant health-related information, such as high alcohol consumption, the insurer typically requires additional information. In Xavier??s case, he would need to fill out analcohol consumption questionnairetoprovide more detail about his drinking habits. This step helps the insurer assess the risk and decide on policy terms, which may include higher premiums, exclusions, or even denial depending on the details provided. It aligns with the LLQP guidelines, which specify that full disclosure and accurate risk assessment are essential steps in underwriting.
- (Topic 2)
Candace, an insurance agent, met with her client Rebecca on March 15th to complete a life insurance application form. Rebecca applied for a T-10 $200,000 life insurance policy, she told Candace that she will wait for her policy to be accepted before making a premium payment. On April 10th, the application was accepted by the insurance company and Candace promptly called Rebecca to give her the good news. Candace delivered the policy to Rebecca on April 15th during the meeting, Rebecca gave Candace a cheque to cover her first premium and a void cheque to cover subsequent premium payments. Candace submitted the cheques to her manager on April 21st. When did Rebecca??s policy come into force?
Correct Answer:C
A life insurance policy generally comes into force when the policy is delivered to the applicant and the first premium is paid. In this case, Rebecca??s policy was officially delivered on April 15th, at which time she paid the initial premium. As per LLQP guidelines, the contract becomeseffective upon the meeting of these two conditions: delivery of the policy and payment of the first premium.
Therefore, since Rebecca met both conditions on April 15th, that is the date her policy came into force.
- (Topic 3)
Dora meets with the following clients, each of whom fills out a disability insurance application:
• Scott, a ski instructor who skydives every weekend in the summer,
• Lamar, a librarian who drives to work daily and spends his free time collecting stamps and watching nature shows,
• Timothy, an administrative assistant who walks 30 minutes each way to and from work, and
• Yashar, an accountant who participates in 5 online chess competitions a week and studies chess in his spare time.
All else being equal, which of Dora??s clients will qualify for the most favorable insurance premium?
Correct Answer:B
Insurance premiums are typically based on risk factors such as occupation and lifestyle. Among the clients listed,Lamar, the librarian, has the lowest-risk lifestyle and occupation. Librarians are generally considered low-risk occupations for disability insurance, and his hobbies (collecting stamps and watching nature shows) carry no added risk factors. Scott??s high-risk activities (skiing and skydiving) would likely lead to higher premiums, while Lamar??s low-risk profile qualifies him for the most favorable premium, according to LLQP underwriting principles.