- (Topic 3)
The one-year anniversary of Sally??s disability policy is quickly approaching. She recently received a letter in the mail from the insurer outlining the requirements to increase her monthly benefit via the future purchase option she added when she initially got the policy. What is required of Sally to increase her monthly benefit?
Correct Answer:B
Comprehensive and Detailed Explanation:
Future purchase options require financial underwriting (proof of income increase), not medical, to adjust benefits (Chapter 7:Insurance Recommendation, Contract, and Service Needs).
Option A: Incorrect; waived with rider. Option B: Correct; income-based. Option C-D: Incorrect; not required.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 7:Insurance Recommendation, Contract, and Service Needs.
- (Topic 5)
(Arthur's assets include a home worth $744,000, savings of $41,000, and a whole life insurance policy with a death benefit of $300,000 and a cash value of $196,000. His liabilities include a $150,000 reverse mortgage and $2,090 income tax owed.
What is Arthur's net worth?)
Correct Answer:C
Net worth is calculated by addingassetsand subtractingliabilities: Assets = $744,000 + $41,000 + $196,000 = $981,000
Liabilities = $150,000 + $2,090 = $152,090 Net Worth = $981,000 - $152,090 =$828,910
Exact Extract:
"Net worth equals total assets minus total liabilities. Whole life insurance cash values are counted as assets."
(Reference:Segfunds-E313-2020-12-7ED, Chapter 4.1 Financial Position of Client)
- (Topic 2)
Jackson, a new life insurance agent, is planning to promote a group insurance plan to small businesses in the area. After some research, he is able to locate a list of small business contact information online. The list contains office hours, phone numbers, as well as the office addresses. He prints off the list and prepares marketing material pertaining to group insurance and mails it to each of the small businesses. Jackson??s business plan is to call the businesses one by one 14 days after the marketing material has been mailed. What should Jackson be aware of to comply with the usual business solicitation practice?
Correct Answer:C
Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:
TheIFSE Ethics and Professional Practice Course (Common Law)outlines compliance requirements for solicitation. Mailing marketing materials to businesses using publicly available contact information is generally permissible under the Personal Information Protection and Electronic Documents Act (PIPEDA), as it applies to personal—not business—information, making B incorrect. However, Jackson??s plan to follow up with phone calls triggers theNational Do Not Call List (DNCL)rules, which apply to telemarketing to businesses and individuals unless an exemption (e.g., existing relationship) exists. The Canadian Anti-Spam Legislation (CASL) (D) governs electronic messages (e.g., emails), not phone calls or mailed materials here. Full compliance (A) requires DNCL checks, making C correct.
References:
IFSE Ethics and Professional Practice Course (Common Law), Module 4: Regulatory Environment, Section on "National Do Not Call List" and "Solicitation Practices."
- (Topic 3)
Eric is an architect who owns his own firm. He employs three staff and is in his fifth year of operation. While recently meeting with his insurance agent for an annual review of his coverage, he mentioned to the agent that he had recently purchased a new printing system and has a sizeable loan on it. In the event of disability, what type of insurance coverage could the agent suggest to ensure the loan payments are made?
Correct Answer:D
Comprehensive and Detailed Explanation:
Business loan protection disability insurance covers loan payments if the owner is disabled, directly addressing Eric??s need (Chapter 5:Insurance to Protect Businesses).
Option A: Incorrect; protects business operations. Option B: Incorrect; covers overhead, not loans. Option C: Incorrect; for buy-sell agreements. Option D: Correct; targets loan payments.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 5:Insurance to Protect Businesses.
- (Topic 4)
Insurance of persons representative Flavie meets with Julius to analyze his needs. At the end of the meeting, Flavie makes another appointment to present the results of the analysis and the proposed strategies. She hands Julius her business card, which says: ??One of the company??s 10 best salespersons at your service!?? Flavie even adds that she is the office??s top salesperson and earns more than $250,000 a year in commissions and bonuses. What changes should Flavie make for her representation practices to comply with the obligations of an insurance of persons representative?
Correct Answer:B
Comprehensive and Detailed In-Depth Explanation: The Chambre de la s??curit?? financi??re (CSF) Code of Ethics (Section 11) and Distribution Act (Section 18) prohibit representatives from using misleading or self-aggrandizing statements that could unduly influence clients. Flavie??s business card slogan, ??One of the company??s 10 best salespersons,?? and her verbal boast about earnings suggest superiority without substantiation, potentially pressuring Julius. Option B, removing the slogan, aligns with ethical standards to ensure representations focus on client needs, not personal accolades. Option A (timing of card) is irrelevant to compliance. Option C (second meeting) doesn??t address the content issue. Option D (commission disclosure) is unnecessary, as disclosing compensation structure is
permissible if relevant. The Ethics manual emphasizes professionalism and prohibits exaggerated claims.
References: CSF Code of Ethics, Section 11; Distribution Act, Section 18; Ethics and
Professional Practice (Civil Law) Manual, Section on Professional Conduct.
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