Free IFSE Institute LLQP Practice Exam with Questions & Answers | Set: 5

Edlyn’s primary concern is to preserve her condo asset, which she intends to leave to her son. Long-term care (LTC) insurance can help protect her financial assets by covering the costs associated with long-term care, thus reducing the risk of needing to liquidate assets like her condo to pay for care. The LLQP materials note that LTC insurance is often used to protect assets against the high costs of extended care, particularly for individuals who want to ensure their assets can be transferred to heirs​. Therefore, the correct answer is B, as Edlyn is seeking to safeguard her assets from potential erosion due to LTC expenses.

Comprehensive and Detailed Explanation:

Key person insurance pays $5,000/month for 12 months max (total $60,000) after a 60-day wait. Replacement expense rider pays $2,500/month during replacement (6 months = $15,000). Total: $5,000 × 10 months (post-wait) = $50,000 + $15,000 = $65,000 (Chapter 5:Insurance to Protect Businesses).

Option A: Incorrect; overestimates.

Option B: Correct; $65,000.

Option C-D: Incorrect; underestimates.

Samira’s individual disability insurance (DI) policy includes achildcare rider, which provides a daily benefit to cover the costs of hiring help to care for her children while she is unable to perform her usual duties due to illness or injury. This rider is particularly useful for policyholders with dependents, as it addresses the financial burden of childcare in cases where the policyholder's disability prevents them from fulfilling their caregiving responsibilities. None of the other options, such as residual disability benefits or hospital indemnity, specifically cover childcare expenses; therefore, the correct answer is the childcare rider​.

Resetsallow theguaranteed amountof a segregated fund contract to beadjusted upwardto lock in market gains. This feature is highly attractive for risk-tolerant investors like Ulysses because it secures gains without sacrificing the original guarantee.

Exact Extract:

"Resetting the maturity and death benefit guarantees upward allows investors to lock in market gains, which can appeal to those investing in volatile, high-risk sectors."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.1.2 Growth Secured by Reset​)

In acontributory group insurance plan, the cost of the premiums is shared between the employer and the employees. For Compact Funds Inc., which has over 30 employees, implementing a contributory plan means that both the employer and the employees contribute to the premium costs. According to LLQP guidelines on group insurance plans, the process usually involves the employer (Compact Funds in this case) receiving the bill for the total premium from the insurer. The employer then deducts the employees’ share of the premium directly from their paychecks​. This allows for efficient billing and ensures that premiums are paid in a consolidated manner by the employer, with the deduction process managed through payroll.

Option B is correct as it accurately describes the billing and payment arrangement in a contributory group insurance plan, where Compact Funds is billed directly by the insurer and then deducts the employee portion from payroll, streamlining the process and keeping it consistent with standard practices as outlined in the LLQP content on group insurance​.

Key person disability insuranceprovides financial protection to a business against the loss of a crucial employee due to disability. Antoine is a critical figure for Kiril’s gym, generating a significant portion of revenue and attracting clientele due to his public profile. This policy would compensate the gym for lost income and potentially cover additional costs incurred while attempting to replace Antoine's unique contributions. The LLQP materials discuss key person insurance as essential for protecting a business against the financial impact of losing a high-value employee, making this option the most suitable for Kiril's needs​.

Comprehensive and Detailed Explanation:

Group critical illness (CI) coverage typically ends upon retirement unless a conversion option is explicitly offered, which is rare (Chapter 8:Group Plan Specifics). Eloise needs CI for lump-sum protection and long-term care (LTC) insurance for monthly benefits in an assisted living facility (Chapter 4:Insurance to Protect Savings).

Option A: Incorrect; group CI rarely converts to individual CI, and it doesn’t address LTC needs.

Option B: Partially correct but incomplete; it misses LTC for assisted living.

Option C: Correct; CI ends at retirement, requiring individual CI, and LTC insurance meets her assisted living goal.

Option D: Incorrect; disability insurance replaces income, not CI or LTC benefits.

Since Jim is buying the annuity for himself and will receive the payments,he must be named as the annuitanton the application.

Exact Extract:

"The annuitant is the person on whose life the annuity is based and who is entitled to receive the periodic payments. In this case, it must be Jim."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 3.2.2 Lives Covered【45:2†Segfunds-E313-2020-12-7ED.pdf**)

Comprehensive and Detailed Explanation:

The 10-day “free look” period starts upon delivery (August 10); Karl returned it August 15 (within 5 days), entitling him to a refund (Chapter 7:Insurance Recommendation, Contract, and Service Needs).

Option A: Correct; within 10 days.

Option B-D: Incorrect; refund tied to delivery, not approval or application.

Comprehensive and Detailed Explanation:

A Private Health Services Plan (PHSP) offers flexible, tax-free benefits (employer-paid premiums are deductible, benefits non-taxable), addressing employee dissatisfaction and tax concerns (Chapter 8:Group Plan Specifics).

Option A: Incorrect; EHT (Employer Health Tax) isn’t insurance.

Option B: Correct; PHSP fits needs.

Option C-D: Incorrect; group plan isn’t optimal or tax-free for employees.