IFSE Institute LLQP - Life License Qualification Program (LLQP)

Since Justin’s annuity had no guaranteed period and no survivor benefit, payments stop at death. Thus, no death claim can be made.

Exact Extract:

"For a single life annuity with no guarantee period, payments cease upon the death of the annuitant, and no death claim can be made."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 3.2.2.1 Single Life Contract【49:4†Segfunds-E313-2020-12-7ED.pdf**)

This question is a direct application of the time value of money concept—specifically present value (PV)—as taught in the LLQP Segregated Funds and Annuities material. Present value “works backwards from a future date” and answers the question: how much is needed now to achieve a future savings goal. The LLQP text provides the formula:

PV = FV ÷ (1 + interest rate)ⁿ

Here, Davy’s future goal is FV = $200,000, the annual return is 3% (0.03), and the time horizon is n = 10 years. Substituting into the LLQP formula:

PV = 200,000 ÷ (1.03)¹⁰

(1.03)¹⁰ ≈ 1.343916, so:

PV ≈ 200,000 ÷ 1.343916 ≈ $148,818.9, which rounds to $148,819.

Therefore, if Davy has at least $148,819 in his RRSP today and earns an average of 3% per year for the next 10 years with no additional contributions, he should reach approximately $200,000 by age 65.

This aligns exactly with the LLQP explanation that PV calculations are used “to help a person determine how much needs to be saved today to yield a specified pension at a future date.”

As per LLQP regulations, insurance agents like Serge are required to provide receipts for any deposits they receive, regardless of the payment method, to ensure transparency and proper documentation of client transactions. This applies to cash, cheques, or bank drafts, offering proof of the transaction to Karine and helping maintain accurate records​.

Option A is incorrect as it lacks specific relevance to the transaction process. Option B is incorrect, as agents generally need to remit funds to the insurer as promptly as possible, with timing requirements varying by jurisdiction but typically within days. Option D is incorrect because cheques should be made payable to the insurer, not the agent, to prevent misappropriation of funds.

An accumulation annuity allows Garry to save and grow his investments over the next 10 years with deferred payments starting at retirement, matching his timeline and retirement goals.

Exact Extract:

"An accumulation annuity is used to accumulate savings over time. Payments commence at a later date specified by the investor (deferred payments)."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 3.2.1.2 Accumulation Annuity​)

To create an appropriate investment strategy, the advisor must understand Kara’s liquidity needs — how easily and quickly she might need to access her money without significant loss. Liquidity considerations are fundamental when setting up an investment plan, especially for someone without prior investments and an uncertain timeline for using the funds.

Exact Extract:

"Liquidity refers to the ability to access funds readily and should always be assessed in determining appropriate investment recommendations."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 1.1.2.5 Liquidity​)

In the LLQP Segregated Funds and Annuities curriculum, a client’s net worth is determined using a net worth statement, which is a snapshot of financial position calculated by listing all assets at their market value and subtracting all liabilities. The manual provides the direct formula: Net worth = value of all assets – value of all liabilities. It further explains that assets are anything owned that has cash value (including the home, savings, and the cash value of life insurance), while liabilities are debts and financial obligations that must be repaid.

Applying those LLQP rules to Irma:

Assets include (1) condo at market value $372,000, (2) savings $22,000, and (3) whole life insurance cash value $133,000. The Segregated Funds and Annuities text explicitly treats life insurance with cash value as an asset because the value can be accessed (cash surrender value or policy loan). Therefore, the correct value to include in net worth is the cash value, not the death benefit. Total assets = 372,000 + 22,000 + 133,000 = $527,000.

Liabilities include (1) reverse mortgage $90,000 and (2) income tax owing $1,070. The manual specifically identifies a reverse mortgage as a liability that must be repaid when the home is sold or at death. Total liabilities = 90,000 + 1,070 = $91,070.

Therefore, Irma’s net worth is:

$527,000 − $91,070 = $435,930, which matches Option B.

Facing potential job loss, the priority for Priscilla should be building an emergency fund rather than continuing to invest. Emergency funds provide essential liquidity in the event of unexpected income loss.

Exact Extract:

"Establishing an emergency fund to cover living expenses during unforeseen circumstances is fundamental before committing to longer-term investments like segregated funds."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 1.1.2.5 Liquidity​)

Group TFSA contributions are made with after-tax money and grow tax-free. GRRSP contributions reduce taxable income immediately because they are tax-deductible.

Exact Extract:

"Contributions to a TFSA are not deductible and must be made with after-tax dollars. RRSP (and GRRSP) contributions are tax-deductible, reducing taxable income."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 1.3.11 Group Plans​)