Free Access IFSEInstitute.LLQP.v2026-06-30.q107 Practice Test (Page 16)

Question 71

Adele retired a few months ago. She sold some of her assets and would like to use the funds to take out a term annuity to increase her retirement income. Adele brings a $300,000 cheque to Germain, her financial security advisor, and wants to begin receiving lifetime guaranteedbenefits in one month with the right to use capital in the event of an emergency. When Germain tells her about alienating capital, the capitalization phase, and the payment phase, Adele becomes confused and asks for clearer explanations. What can Germain say to help Adele understand?

A.If her capital is alienated now, i.e., if ownership of the money is transferred to the insurer, the insurer will be able to guarantee all the conditions of the annuity. Since the first benefit will be paid in a month, the contract will automatically be in the payment phase

B.The alienation will allow Adele to keep ownership of the capital and use it in the event of an emergency. The capitalization phase will enable the insurer to grow the capital before paying the annuity

C.The contract will be a deferred annuity contract for one month and will be in the accumulation phase until the insurer takes possession of the $300,000 in capital. For benefits to be paid, the contract will enter the payment phase

D.To grow the transferred capital and pay the annuities as planned, the contract will be an immediate annuity contract in the capitalization phase until the annuity's guaranteed phase expires. The contract will then enter the payment phase

Question 72

Anita is a 50-year-old woman who is thinking of purchasing a $150,000 permanent life insurance policy to pay for the capital gains tax that will be payable on her country home upon her death. She had purchased the home twelve years ago and wants to bequeath the property to her niece when she dies.
Which of the following features about a permanent insurance policy is TRUE?

A.The coverage ends when Anita turns 100.

B.The premiums will remain level for the duration of the contract.

C.The policy cannot be cancelled by Anita.

D.Anita must contact the insurer if there is a change in the insurability.

Question 73

Coraline is a landscape gardener who owns a disability insurance (DI) policy. The policy will pay her a
$3,000 monthly benefit after a 90-day waiting period. She is diagnosed with cancer, and because she has to undergo months of chemotherapy, she will be unable to work. She calls Robin, her insurance agent, to inform him of her diagnosis. She would like to know more information about the claims process.
Which of the following statements is CORRECT?

A.Coraline must contact her agent by phone within 30 days of learning about her diagnosis.

B.Coraline has 30 days to provide the insurer with all of the information required to process the claim.

C.The insurer must pay Coraline the benefit amount within 30 days after receipt of the proof of loss.

D.The payment of the initial benefit to Coraline must occur within 30 days after the end of the waiting period.

Question 74

Denise, aged 52, is a nurse in a facility for seniors who can no longer live independently. She earns $45,000 a year, with a marginal tax rate of 38%. She has very little savings and is aware that, if she became unable to live independently herself, she could not afford the $4,500 a month it costs to live in a facility such as the one she works at. However, Denise recently learned that she could purchase affordable long-term care insurance.
Taking the underwriting requirements into account, how much coverage should she take out?

A.$4,500 per month.

B.$2,325 per month.

C.$2,250 per month.

D.$1,395 per month.

Question 75

Andrea, owner of Andrea's Fashions Inc., employs her designer daughter Judy, who will carry on the business after Andrea is gone. Wishing to ensure that the business would not suffer financially when Andrea passes away, Andrea decides at age 50 to have her business own, pay for, and be the beneficiary of life insurance on Andrea's life. The type of insurance that best suits is non-convertible Term 10 life insurance renewable until age 80.
What should her life insurance agent advise regarding this policy?

A.The coverage will end at Andrea's age 80.

B.The coverage can be converted to permanent insurance at any time.

C.The coverage can only be renewed once.

D.The coverage will pay a benefit to Judy upon Andrea's death.

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Question 71

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Question 75

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