Free IFSE Institute LLQP Practice Exam with Questions & Answers | Set: 4

Comprehensive and Detailed In-Depth Explanation: Segregated funds are investment products offered by life insurers, combining insurance and investment features. Under Quebec’s Civil Code (Article 2457), proceeds from life insurance contracts, including annuities, are exempt from seizure if the beneficiary is the policyholder’s spouse, ascendant, descendant, or an irrevocable beneficiary. Segregated funds qualify for this protection because they are structured as annuity contracts, distinguishing them from mutual funds. Option A correctly identifies this legal protection tied to beneficiary designation. Option B misattributes the protection to the AMF Guideline, which regulates segregated funds but does not grant seizure exemption—that stems from the Civil Code. Option C overgeneralizes, as not all insurance products are exempt (e.g., recent contributions may be contested under Article 2459). Option D focuses on the guarantee, which is a feature of segregated funds, but the creditor protection hinges on the insurance contract status and beneficiary rules, not the guarantee alone. The Ethics manual requires advisors to explain legal protections accurately.

Comprehensive and Detailed In-Depth Explanation: In life insurance, a death benefit requires proof of death, typically a death certificate. Under Quebec law (Civil Code, Article 92), if a person disappears and death cannot be immediately confirmed (e.g., no body found), a court can issue a declaratory judgment of death after a waiting period—usually 7 years, or sooner with evidence of peril (e.g., forest fire). The LLQP notes that insurers delay payment until this legal determination, as premature payment risks fraud. Option D correctly states that the beneficiary could receive the face amount after this process. Option A (30-day payment) assumes immediate proof, which isn’t available here. Option B (premium refund) is incorrect, as the contract remains valid, not void. Option C (impossible payment) overstates the issue—payment is possible post-judgment. The Ethics manual mandates advisors to clarify claim processes, especially in uncertain scenarios.

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 incorrectly lists 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.

Comprehensive and Detailed In-Depth Explanation: Monique seeks non-legal recourse after her disability claim denial. The OmbudService for Life & Health Insurance (OLHI) is a free, independent service resolving disputes between policyholders and insurers across Canada, including Quebec. The Autorité des marchés financiers (AMF) oversees Quebec’s insurance industry and handles consumer complaints (Distribution Act, Section 103). Option C combines these accessible options, ideal before legal action. Option A (Chambre de la sécurité financière and syndic) targets advisor misconduct, not insurer decisions. Option B (OSFI) regulates insurer solvency federally, not individual claims. Option D (CLHIA) is an industry association without complaint authority. The Ethics manual encourages advisors to inform clients of dispute resolution options like OLHI and AMF.

As a life insurance agent, Germain’s role is to assist the beneficiary in filing the claim but not to guarantee specific timelines for payment. Agents can help by providing the necessary claim forms, explaining the process, and offering guidance on filling out the forms accurately. The timeline for payment is determined by the insurer once they have received and reviewed the required documentation. Assuring specific payment timelines, as implied in options B, C, and D, is beyond Germain’s authority and would be inaccurate. Therefore,Option Ais the best response for Germain to assist Jason appropriately​​.

Comprehensive and Detailed Explanation From Exact Extract:

The LLQP defines accidental death as resulting solely from accidental means, not from a medical condition. Since the heart attack was the proximate cause of death (not the accident itself), the accidental death rider does not apply. Only the base $500,000 will be paid.

Under the rules governing Locked-In Retirement Accounts (LIRAs) in Canada, which apply similarly across provinces including Ontario, there are specific circumstances under which a person may access funds prior to the usual retirement age. In general, LIRA funds are intended to be kept locked-in until a specified retirement age. However, early withdrawal is permitted if the account holder becomes disabled and has a reduced life expectancy, as stated in LLQP materials. Thus, Nathalie’s disability and reduced life expectancy would qualify her to withdraw from the LIRA. Moving to another location, retiring, or collecting QPP benefits do not generally permit early withdrawal from a LIRA​​.

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As Paulette is injured during work and is covered by her employer’s group disability plan, her disability benefits would be paid out under this group insurance policy. Group disability insurance provides both short- and long-term coverage, as outlined in her employer’s benefits plan. This plan typically covers income replacement for non-workplace injuries or illnesses. However, since this was an on-the-job accident, it may be covered by the CNESST, but group insurance often still serves as the primary provider in situations where a workplace injury results in short-term disability exceeding standard workplace injury benefits. The SAAQ would only cover injuries directly related to road accidents within its jurisdiction. Employment insurance (EI) provides general income replacement but is secondary to employer-provided group disability benefits​​.

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As per LLQP guidelines and privacy regulations in Canada, an insurance agent like Vasu is required to submit all medical and lifestyle-related information to the insurer as part of the application process. Additionally, the agent is permitted to retain a copy of this information in his client file for record-keeping and future reference purposes. It is essential for compliance and potential follow-ups related to policy servicing or claims. Privacy laws do not permit Vasu to share this information with unauthorized parties, such as his supervisor or the client, beyond what is required for processing the application, unless consent has been explicitly provided​​.

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The Chambre de la sécurité financière code of ethics applies specifically to financial security advisors and financial planners in Quebec. This code outlines the professional conduct required of those working within the financial services industry who advise clients on security products. Administrative assistants, claims adjusters, and damage insurance agents do not fall under the purview of the CSF code of ethics as they are regulated under different professional codes or by different oversight organizations​​.

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