IFSE Institute LLQP - Life License Qualification Program (LLQP)

Six years ago, Gerard, aged 28, purchased a life insurance policy.

Gerard just got married to Tanya, and they both want to purchase more insurance. Reviewing Gerard’s policy, Tanya notices that Gerard neglected to mention that he had migraines due to concussions suffered from playing football when he was a teenager. Gerard did not intentionally neglect to mention the migraines as the migraines were never an ongoing issue once he stopped playing football.

Which statement is true?

Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem and only visits them sporadically. Vladimir's younger brother Sergei, on the other hand, is a dependable and helpful uncle who helps Svetlana regularly with the children. Svetlana meets with Robert, an insurance agent to review her life insurance needs because she wants to make sure that her children are taken care of if she were to die prematurely. Robert suggests that she purchase a $200,000 policy. Who should she name as a beneficiary?

Maxine meets with Toshiko, an insurance agent for United Life, to purchase a $10 million universal life insurance policy. Once United Life reviews Maxine's file, they agree to insure her for $3 million. United Life then contacts Extra Life Company, who agrees to insure Maxine forthe additional $7 million. Toshiko asks his supervisor Bob how the death benefit will be paid to Maxine's beneficiary when she dies.

Gabe and Martine are partners in a successfully run clothing company. They have a current buy-sell agreement in place which outlines how their respective share of the business is to be sold/purchased should one of them, or both of them, pass away. They have come to John, their financial advisor, to help them purchase life insurance as they understand this is the most efficient way to fund this arrangement.

What are some strategies through which the buy-sell agreement could be funded?

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?

Joseph, a retired jeweler, meets with Larry, an insurance agent with Summit Life Co., to review Joseph's life insurance needs. Joseph has made it clear in his will that upon his death, his son will inherit his collection of diamond necklaces, valued at $1.8 million.

What type of asset is Joseph's diamond necklace collection considered to be?

Angela works in a biomedical research lab where she has been assigned to discover possible antidotes to the anthrax virus. While the discovery process of testing possible antidotes would expose her to the deadly virus, she is excited about the assignment.

Knowing that anthrax can be contracted through infected food, air or contact with skin, what risk management strategy would Angela employ by wearing protective gear over her mouth and skin?

Goran and Tanja married two years ago. Last year, they purchased and moved into a three-bedroom house in the suburbs. The current balance on their mortgage is $655,000. They meet with Ljubomir, an insurance agent, to purchase a joint term life insurance policy to cover the mortgage. When Ljubomir asks about their existing coverage, Goran shares that he has none. Tanja explains that she owns a universal life (UL) policy with a level death benefit of $50,000 and a cash surrender value (CSV) of $5,000, purchased 6 years ago from another agent. Tanja would like to surrender her UL policy and use the $5,000 CSV to pay for a trip to Europe. What additional information about Tanja's UL policy does Ljubomir need to collect?

Natalie and Ted, who are both 40, meet with an insurance agent to discuss their life insurance needs. They have four major concerns. Their first concern is that Natalie is the primary income earner: if something happened to her, Ted would not be able to provide their two young children with the life they are accustomed to. Their second concern is that if something were to happen to Ted, Natalie would have to pay for childcare. The third issue is that they want to make sure the mortgage on their primary residence is paid off in the event something happened to either of them. Lastly, Natalie is concerned about the tax liability on the family cottage when it gets passed on to the kids. The family cottage is fully paid. The agent notes that most of the couple's concerns could be addressed with term life insurance products.

Which of their concerns can only be addressed with a permanent life insurance product?

Julie and her spouse, Vincent, have two children, the youngest of whom is 5. Their salaries are roughly equivalent, at around $65,000 each. If Julie loses her spouse, she would receive, each month, $700 from the government plan and an orphan’s pension of $230 for each of her two children. She would also receive a monthly pension of $790 from her spouse's pension plan. The monthly expenses after her spouse's death are estimated at $4,000. Julie's disposable income will be about $1,500 a month. She is worried about the impact on her children's standard of living, especially over the next 10 years.

What is the annual shortfall if Vincent dies?