Gino, an insurance of persons representative, is cleaning his office and going through old files. He comes across a file from a former client, Nathan, who owned a 20-year term insurance policy that was cancelled 3 years ago. Nathan now has a different representative and Gino no longer has any contact with him. Gino would like to know if he can destroy Nathan's file.
Which of the following options is CORRECT?
Benjamin is a financial security advisor working for the Larson Group. He is following a mandatory compliance training session given by Andrew, the compliance manager. Andrew explains the importance of following the Chambre de la sécurité financière code of ethics, and Benjamin would like to know to whom the code of ethics applies.
What is Andrew's CORRECT response?
Which organization provides protection for holders of segregated fund contracts in Canada if the insurer becomes insolvent?
Janice, age 73, plans on purchasing a joint-and-last-to-die annuity. She wants to receive the highest possible annuity payments.
Who should be the joint annuitant?
Disappointed with the performance of his current investments, Gerard wants to make changes to his portfolio. While his investments are well diversified and professionally managed (as he requested from the outset), their value fluctuates significantly up and down. The issue is that Gerard, a professional stuntman, often puts his life on the line. Should he die, he would like the capital in his investments to be protected as much as possible—if not in whole, then at least a good portion—which is not currently the case.
What type of investment would be most suitable for Gerard?
Kirill purchases a $250,000 permanent life insurance policy on the life of his grandson, Dmitry. Kirill asks his wife Katya to pay the policy premiums and names his daughter, Natalya, as the subrogated policyholder. He does not name a beneficiary. Subsequently, Kirill dies without a will.
Who will become the new policyholder?
Surjit and Rajbir got married in 2010, and Surjit named Rajbir as the irrevocable beneficiary of his life insurance contract. In 2017, the couple divorced amicably, and Surjit met with his insurance representative, Ivan, to review his plans. Surjit tells Ivan that he would like to keep Rajbir as his beneficiary.
What should Ivan counsel his client to do?
Gold, a financial security advisor, recently met with a wealthy client who needed tax advice. The client also wanted to draft a will and a mandate in case of incapacity. Eager to meet his client’s needs and make recommendations, he did not think it necessary to propose a meeting with the firm’s tax expert and notary. Towards whom has Gold breached his duties and obligations?
Sabrina is an insurance representative with an insurance of persons certificate issued by the Autorité des marchés financiers (AMF). Her client, Stephanie, is a Quebec resident who accepted a job with Service Canada, in Ottawa, and purchased a condo there. Stephanie calls Sabrina to explain that her new job requires her to work in Ottawa three days per week, but she is still a Quebec resident; she spends four days a week with her family in Granby, Quebec. Stephanie asks Sabrina if she can buy mortgage insurance from her to help cover the mortgage on her new condo.
What should Sabrina answer her?
Insurance of persons representative Véronique is meeting clients referred by an acquaintance for the first time. Observing some suspicious behaviours on their part, Véronique is thinking about reporting the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Which behaviours are signs of suspicious transactions?
Luc is married and the father of two teenagers. His annual salary is $60,000. His wife Marie works part-time with an annual salary of $24,000. The family’s monthly expenses are $3,500. Luc and Marie are not members of any group benefit plan. What is the minimum monthly amount of disability insurance coverage that Luc needs to cover his risk of disability?
Lara, owner of Huck’s Oil Change Ltd., meets with a life insurance agent to discuss a renewal package for the group benefits plan offered to employees. Lara employs 20 individuals, all of whom are covered under the group plan. The employee turnover rate is 10%, and the insurer has rated the group’s claims experience credibility at 20%. In establishing the group’s premiums under the new plan, how much weight will the insurer give to the standard manual rate for a comparable group?
Arthur is a 79-year-old long-term care (LTC) policyholder whose daughter, Sheila, visits daily to help him get dressed and prepare meals. Sheila wants him to enter a nursing home because he isunable to dress himself. Though he cannot prepare his own meals, he can still feed himself, and once undressed, he can wash himself, seated in the bathtub.
Is Arthur eligible to receive LTC benefits?
Patricia is a laboratory technician who normally earns $4,000 a month. A few months ago, she injured her leg rollerblading and was unable to work for four months. Since she owns a disability insurance policy with a residual benefit option, she received $2,400 a month from the insurer. Now that she is recovered, her doctor has cleared her to slowly return to work. Since she cannot work her regular full-time hours, her pay has decreased to $3,000 a month.
How much will she receive from her residual benefit when she returns to work?
Zaid married Baheya five years ago in Montreal. A year later, Zaid purchased two individual term-life insurance policies, one on his life and the second on Baheya’s life, each with a death benefit of $250,000. The marriage didn't last long, and the couple divorced shortly thereafter. Baheya went on to marry Omar, and the new couple had a baby together, named Darwish.
Last week, Baheya died in a car accident. While settling her estate, Omar discovered that no beneficiary was designated on Baheya’s life insurance policy.
To whom will Baheya’s death benefit be paid?
Last week, at a dinner party, Dario, an insurance agent, met Andrew, a successful businessperson with a net worth of over $10 million. Dario spent the evening following Andrew around, telling him how he could help him manage his finances. The day after the meeting, Dario sent a fruit basket to Andrew's office. Every day since, Dario has been calling and urging Andrew to meet with him and take advantage of his services and insurance products.
Which duties and obligations did Dario break?
The company Xtra is growing. Mr. Trenet, chair of the executive committee, invites his financial security advisor, Noah, to meet with them to underwrite an annuity contract. The treasurer of Xtra offers to invest $2,500,000 of the company’s retained earnings. Before voting on a resolution to designate a policyholder, the treasurer asks Noah if Xtra can be designated as the policyholder instead of Mr. Trenet. What answer should Noah give?
Becky opened a small bakery five years ago. Although she struggled at first, her business hasbecome increasingly successful. Until recently, she only had two full-time employees, but now she hired two more and relocated the store to a busier street. The rent is higher, and so are the profits. As the bakery expands, however, Becky is becoming increasingly concerned about what would happen to it if she became unable to work—even for just a few months—due to an illness or an injury. Which one of the following options would most suitably protect Becky’s business against such a risk?
Alex, aged 35, has worked for many years as a salesman in a small used car dealership. He earns $70,000 a year. He has no group insurance at work and no individual insurance. Single and without children, his priority is to save enough money to retire at age 60. He makes regular contributions to his RRSPs, in which he has accumulated $400,000. He owns a condo valued at $250,000 on which he has an uninsured mortgage of $150,000. What financial risk is Alex most exposed to?
Eloise has critical illness coverage through her group insurance plan at work. She is 54 years old, in excellent health, and is planning to retire soon. She meets with Sonia, her insurance agent, to plan her retirement and to make sure she will still be covered in the event of critical illness. To make sure she is not a burden on her family, Eloise would also like to receive monthly benefits in the event she is placed in an assisted living facility. What should Sonia tell her?
Denise, age 45, is a member of her employer’s group insurance plan, which provides disability protection for 60% of her annual salary of $60,000. Louis, her 42-year-old spouse, is self-employed, has an annual income of $45,000, and no disability protection. As parents of three teenagers, Denise and Louis need $6,000 a month to meet their financial obligations with respect to such expenses as housing, food, car, clothing, and entertainment. Which of the following best characterizes Denise and Louis’ current protection?
Cory is a recent college graduate who has just been hired by a marketing firm in an entry-level position. His employer group benefits only cover a short-term disability to a maximum of 119 days. He meets with an insurance agent to talk about disability coverage. To fully cover his salary, he would require a $3,000 monthly benefit. In reviewing options, he thinks that his ideal coverage of a 30-day waiting period and a “to age 65” benefit period comes at a cost that exceeds his budget. What recommendation should the insurance agent make to Cory regarding coverage?
Laekyn purchased an individual disability insurance policy 3 years ago from Awah, her insurance agent. Today, Awah receives a call from Laekyn, who says she is hospitalized following a suicide attempt. Laekyn says her doctor diagnosed her with bipolar disorder and expects she will be able to return to work in 3 months.
Will Awah be able to help Laekyn receive disability benefits?
Pierre-Marc, aged 32, is a dentist with a rich clientele. His income is substantial. Five years ago, he purchased an “any occupation” disability insurance policy. Today he meets with Joseph, his life insurance agent, to determine whether this type of coverage is still adequate. What should Joseph tell him?
Amani owns Amani's Passions, an eco-friendly cosmetics company she started in her garage three years ago. The business is booming—so much so that Amani's Passions recently hired over 20 employees to keep up with demand. Now Amani wants to set up a group insurance plan for her staff.
Whose role is it to solicit quotes from insurers and put the right plan in place?
Kiril is the sole proprietor of a small gym with five employees. His sales manager, Antoine, is a former Olympic athlete, responsible for generating close to 50% of all revenues for the gym. Thanks to Antoine's popular social media presence, the gym is profitable and growing rapidly. However, Kiril has concerns about the future profitability of his gym should Antoine become ill or injured since the other employees are not local celebrities and would not be able to replace Antoine’s contribution to the business.
Which of the following types of insurance policy would protect the gym if Antoine were unable to work?
Joshua took out key person disability insurance for his computer engineer, Younes. Monthly benefits after a 60-day waiting period amount to $5,000 a month for 12 months with a replacement expense benefit rider of $2,500 a month. Following a ski accident, Younes remained in a coma. It took Joshua six months to find a replacement with the same knowledge and skills as Younes. How much did Joshua receive from the insurer?
(Gregory and Vanessa married at an early age and had three children, who are now in their forties: Eve, Rick and Max. When the couple retired five years ago, they purchased a joint life annuity. They also had a will drawn up naming the three children as equal beneficiaries of their estate. The will specifies that Eve will act as executor of the estate.
Last week, Gregory and Vanessa both died in a car accident.
Who could make a death claim as regards the annuity?)
Seven years ago, Amber invested $150,000 in a non-registered equity segregated fund. Her investment grew, and today, the market value of her fund is $165,000. She places an order to redeem her fund and she wants to know how her investment will be taxed.
Larson, an insurance agent, meets with Julia, a real estate agent, to review her insurance needs. Julia has $500 in her savings account and does not own a tax-free savings account (TFSA) or registered retirement savings plan (RRSP). She earns an average of $150,000 a year in sales commissions and rental income from two condo units she owns. The combined value of her income properties is $1,000,000, and the mortgage is $200,000.
Larson recommends that Julia open a TFSA and use it to invest $400 a month in a money market fund.
Which of the following personal risks is Larson trying to mitigate with this advice?
Rose and Louis invested in a segregated fund eight years ago. Louis is the contract owner. This year, Louis unexpectedly had to be moved into a nursing home. They had to make a withdrawal from their non-registered account to pay the expense of the nursing home. They will have to make another withdrawal next year, and in the following year the contract will mature.
How will the amount received at maturity be treated for tax purposes?
(Kara's uncle recently passed away, leaving her an inheritance. Since Kara does not hold any investment account and is not sure what to do with this unexpected influx of money, her cousin referred her to his own financial advisor.
What information should the advisor first seek to obtain from Kara to begin developing an investment strategy that meets her needs?)
(Dominique invested $25,000 in fixed-rate GICs and $25,000 in bond segregated funds.
What type of risk do these investments involve?)
Gia is getting ready to invest for her retirement in 20 years’ time and makes her very first RRSP contribution. Her risk tolerance is high, and she determined with her life insurance agent that a segregated fund could be a good investment choice.
Which one of the following segregated funds would be most suitable for Gia?
(Arthur's assets include a home worth $744,000, savings of $41,000, and a whole life insurance policy with a death benefit of $300,000 and a cash value of $196,000. His liabilities include a $150,000 reverse mortgage and $2,090 income tax owed.
What is Arthur's net worth?)
Caleb meets with Miles, his insurance agent, to invest for his retirement. Caleb tells Miles that he will not need his funds for the next 25 years, he is comfortable with market fluctuations, and he would like a fund that mimics the S&P/TSX Composite index.
Which of the following funds will best suit Caleb's needs?
Over the years, Agnes, a disciplined investor with a modest income, was able to save over $140,000 in an accumulation annuity. She plans on using the funds in a few years to travel the world and enjoy life while she is still healthy.
Which of the following statements about her annuity is TRUE?
(Clara is saving for a house and will likely need her money within a year. She seeks a segregated fund with minimal penalties for quick access.
Which sales charge should Irving recommend?)
Having recently gotten married, Eddie and his spouse are currently looking for a home. They believe it could take up to 12 months for them to compare houses and make a firm purchase decision. Eddie has some RRSP and TFSA savings that are currently invested in equity funds. Now in his mid-thirties, he has been investing for the past 10 years and is familiar with how the stock markets work. He generally feels comfortable with high-risk investments. To help with the down payment, Eddie’s parents provided him with $100,000 cash. Eddie is thinking of investing this money until the actual home purchase but is not sure what the best course of action would be.
What should Eddie do with the cash from his parents to fulfill his objective?
Arianna, a healthy 61-year-old university professor, is retiring this year and wants to transfer the funds she accumulated in her registered retirement savings plan (RRSP) into an annuity. She is looking at different options and would like to know which of the following annuities will pay the highest monthly benefit.
Toufik owns a chain of pizza restaurants. He recently surveyed his restaurant managers and discovered they were not fully satisfied with their compensation plan. Toufik is therefore thinking of setting up a group savings plan for them. He would like the plan to provide his managers with an incentive to maximize productivity in the restaurants, and would be happy to contribute to the plan as long as his business thrives. He would not, however, want his employer contributions to be subject to the payroll charges that apply to salaries.
What type of group savings plan would meet Toufik’s requirements?
Six years ago, Diu purchased an immediate life annuity with a 10-year guarantee period. The annuity paid her a monthly benefit of $1,800. She named her son Shan as the beneficiary of the policy and her niece Haru as a contingent beneficiary. Shan died four months ago in a motorcycle accident and between grieving and planning the funeral, Diu forgot to update her beneficiary designation. Last week, Diu died of a heart attack.
Who would receive the annuity benefits?
Karine receives $200,000 from her mother's estate and decides to purchase an annuity. Her insurance agent Serge goes over her options with her, and she chooses the annuity that best suits her needs. Serge proceeds with the transaction.
Which of the following statements about the transaction is TRUE?
(Jorge meets with his new financial advisor. He brought a series of documents so that she can determine his investor profile.
Which of the following documents will not be helpful for determining Jorge’s investor profile?)
Geneviève has won $100,000 in the lottery and now wants to invest this amount. She has a very good risk tolerance and a long-term investment horizon. Furthermore, Geneviève—who works for a firm of economists—is convinced that interest rates will rise on a regular basis over the next 10 years and is firm in her requirement that these interest rate increases not affect her investments, insofar as possible.
What kind of investment, from among the following, could be suitable for Geneviève?
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?
Ben and Pam, both aged 37, are married with three young triplets, Lucas, Jack, and William. Ben works as a pharmaceutical rep, and Pam is a stay-at-home mom. Ben’s monthly salary is $6,000. An unforeseen accident happening, where Ben were to die, would leave Pam and the kids in serious financial trouble. Ben and Pam want to address this, so they meet with a licensed life insurance agent to discuss purchasing a life insurance policy. The agent, assuming an interest rate of 4%, shows Ben and Pam the capitalized value of his lost income.
Based on the above information, using the income replacement approach, how much life insurance does Ben need?
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 for the additional $7 million. Toshiko asks his supervisor Bob how the death benefit will be paid to Maxine's beneficiary when she dies.
Gary owns a $500,000 T-20 life insurance policy with an accidental death rider of $250,000. His estate is named as beneficiary. Gary dies when his car falls into a lake. The autopsy shows that he had a heart attack, which caused his death and led to the accident.
What death benefit amount will the life insurance company pay Gary's estate?
Three years ago, Douglas purchased a whole life insurance policy with numerous supplementary benefits and riders. Today, he meets with his doctor who informs him that he has late-stage colon cancer and has only a few months to live. Even with surgery, his chances of survival are low. Douglas calls his insurance agent, Penny, to ask her what he should do to obtain a benefit immediately.
John purchased a permanent life insurance policy for his grandson, Richard, when Richard was born 28 years ago. This policy has increased in death benefit over time and holds sizeable cash value. Now that Richard is older, John would like to transfer this policy to him as he now is working and has a family.
What does John need to know about this transfer in relation to tax implication?
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?
Donald is married and has two children, ages 3 and 5, one of whom is severely disabled and will never be able to live independently. He is considering buying $500,000 of life insurance to guarantee care for his disabled child for his lifetime. He also wishes to insure his 20-year mortgage of $250,000 to ensure that his family can remain in their home in the event of his death.
What life insurance policy would you recommend to Donald?
Pete is the owner of Blenheim News Tribune Inc, a company responsible for producing the local newspaper. He has owned the family-run business for 30 years, and he currently employs 10 people. Peter wants to offer a group benefits plan to his staff, so he meets with Daphne, a licensed insurance agent to go over some options. He would be willing to cover 75% of each employee’s required premium and ask that each employee be responsible for their remaining 25%.
Based on the information provided, which statement is true regarding Blenheim News Tribune Inc's group insurance premiums?
Axel owns a $150,000 whole life insurance policy with an accumulated cash surrender value (CSV) of $20,000. His monthly premiums are $300, due on the fifth day of each month. Axel misses his November 5 premium payment and then dies a few weeks later, on November 20.
Dennis, aged 56, is an actuary. He owns both a disability insurance policy and a renewable term life insurance policy. His life insurance policy includes a supplementary benefit: the waiver of premium for total disability benefit. Following a motorcycle accident, Dennis suffers a traumatic brain injury. His disability benefits begin after the waiting period. While receiving those benefits, his term life insurance policy comes up for renewal.
How will the supplementary benefit included in that policy help Dennis?
Antonin and Magali are common-law partners in their thirties. They have two children together: a five-year-old daughter and a two-year-old son. Divorced from ex-wife Vanina, Antonin must pay her $1,500 a month in child support until their 10-year-old son reaches 25 years of age. Antonin is covered under a group life insurance policy equal to one year of his $75,000 annual salary. Magali does not currently earn any income, as she takes care of their two children full-time. Antonin is the sole owner of their residence, which will be fully paid off in 25 years.
What life insurance coverage do Antonin and Magali need in their situation?
Coraline owns a $250,000 whole life insurance policy. She purchased the policy last year and does not have any funds accumulated in her cash surrender value (CSV). On December 30, Coraline assigns the policy to the cancer foundation, and she plans on continuing to pay the $200 monthly premium. Coraline calls her accountant James to ask him how much of her donation she will be able to use to obtain a charitable tax credit this year.
Life insurance agent Alexandra completes a life insurance application with her client, Joshua. After three months in underwriting, the application is accepted and the policy is issued on a standard rate. Alexandra goes to deliver the policy. When she gets to Joshua's, he tells her how he just got out of the hospital with a serious blood clot.
What should Alexandra do?
Ashley meets with her life insurance agent for a needs analysis. She wants her two kids, currently nine and seven, to be well provided for in the event of her untimely death. Ashley is also concerned about the tax liability that her RRSPs will create for her children. Her need for life insurance is determined to be $800,000 to support the children and $50,000 for the tax liability.
Ashley decides to purchase a term life insurance policy to provide for her young children if need be, and a permanent policy for the tax liability.
How should Ashley set up the beneficiary designations?
Dominic suffers a heart attack on October 1 and dies a little over a month later, on November 7. At the time of his death, he owned a $150,000 critical illness (CI) insurance policy, purchased 10 years earlier. Dominic never failed to pay the $100 monthly premium. When he died, the insurer had not yet issued the benefit payment.
How will the CI benefit be treated?
Jean, who is in business, would like to understand why his segregated funds, which resemble mutual funds, allow this type of asset to be sheltered from creditors. How should Patrice, his financial security advisor, answer?
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?
Nelson is turning 46 and wants to explore additional tax planning opportunity. He is an avid investor and has invested into a lot of mutual funds and stocks. His RRSP is currently maxed out. He is meeting with Andrew, his financial advisor with life insurance license, to discuss on his financial future and some life insurance policy options. As a risk taker, Nelson would like to have a plan that would allow him to supplement his retirement income when he reaches 70. However, his employment income is very high and his marginal tax rate will remain at the top bracket even after his retirement.
What recommendation should Andrew make in order to fit Nelson's need?
Alex is meeting with his financial advisor, Shannon, to discuss potential life insurance options. Alex's need for insurance will increase gradually over time due to growth on his investment properties. He would like the mortgages and taxable gains paid off if he were to pass away. Shannon recommends a permanent policy, as Alex's need is long-term, and could extend beyond any period of time a term policy would cover. Alex also wants to add an extra coverage onto this policy as he wants to be provided with additional growth over time he needs.
Which rider would work for Alex?
Georges is a widower and sole shareholder of the firm Distribution Beluga. Upon his death, he will bequeath the firm to his son, Kevin. During a recent discussion with his accountant, the accountant told Georges that when he dies, Kevin will face a significant tax burden because the fair market value of the firm (a Canadian-controlled private corporation), once the ACB is deducted, is $4,600,000. Furthermore, Georges has never taken advantage of the lifetime capital gains exemption, which will be estimated to be $1,250,000. George's tax rate is 48%.
What will Kevin's tax debt be upon George's death?
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?
Wesley is a self-employed plumber. He meets with a licensed life insurance agent to explore his options regarding disability insurance. Wesley’s earnings have been stable over the past few years.His business generates gross income of $120,000 annually and write-off expenses of $30,000. Wesley’s average income tax rate is 30%. What income amount should be used to calculate the maximum disability benefits Wesley is entitled to?
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?
Josephine visits her dentist in downtown Victoria, BC, to have a cavity filled. The procedure costs her $550 but the maximum fee for a standard filling, according to the provincial dental schedule, is $400. Josephine works for a company that offers employees group dental coverage with a yearly maximum of $1,000 and an 80% co-insurance factor.
How much will Josephine receive from the insurer for her procedure?
France is a daycare owner who has an employer group benefits plan in place for her employees. During her annual renewal meeting with her insurance agent, she is told that the plan’s rates are increasing by a surprisingly large percentage. Her agent explains that although most of her staff are young females in their 20s, the claims experience is higher than the industry norm. What amendment to the group plan could France’s agent suggest to help control the cost?
Maryse, an insurance of persons representative, meets with Anita, an actress, to complete a life insurance proposal. Maryse asks her for proof of age and identity. Anita does not like giving out her personal information and asks Maryse if she really needs to ask for these documents. Under what legislation is Maryse able to ask for these documents?
Kyra is the owner and president of Borealis Fit, a martial arts studio with 15 employees. The centre opened five years ago and has done well. Kyra was never able to offer her employees any benefits until now. Kyra meets with Monica, an insurance agent, to implement a group insurance plan for the employees.
Which method of calculating rates will the insurer use to quote the group premiums?
Pierre is an insurance of persons representative. His new client, Carole, wishes to buy life insurance but wants to know everything about life insurance products before making a choice. What are Pierre’s responsibilities in this case?
Insurance of persons advisor Somalia is careful to comply with the standards and regulations when she meets with potential clients. Under no circumstances would she want them to feel aggrieved or not respected. She makes sure to know their rights. Which legislation does Somalia not have to worry about?
Valerie, age 42, recently left her job after 15 years of service. She participated in a defined contribution pension plan and had accumulated benefits amounting to $88,000, eligible for transfer into a registered contract. What must Valerie do with this money?
Julie and Jim have been married for 16 years and decide to divorce. They draw up a list of property that will be partitioned based on the provisions of family patrimony: the family home, the cars, the RRSPs, and the benefits accrued with the RRQ during the marriage. What other items should be added to Julie and Jim's list?
Elizabeth is a seasoned insurance agent. She meets with Harold, a new agent, to help him better understand the industry and the processes that they must follow. Elizabeth tells Harold about a body that administers the regulatory system applicable to insurance intermediaries. Which of the following is Elizabeth referring to?
Oscar is a chartered accountant who owns and operates his own firm, Tax Time Ltd., with the help of five employees. The provincial accountants' association offers group benefits plans to its members' firms. Oscar recently contacted the association to have a group benefits plan quoted and put in place for his firm. Who will be the plan sponsor?
After completing a thorough needs analysis, Dimitri, an insurance agent with Health Assure, recommends that his client Chandler purchase a deferred annuity contract and contribute monthly to a balanced segregated fund to build up savings that Chandler can use as retirement income. Dimitri explains to Chandler that the type of annuity contract he is recommending has two distinct phases.
What are those two phases?
Miguel applied for a disability insurance policy nearly three months ago. He recently received notice from his agent that his application was approved, with an exclusion applicable to his lower back due to a prior injury. The agent brought the exclusion amendment with the policy at the delivery appointment. Miguel signed and accepted it. He gave the agent a copy of a void cheque to set up direct billing for the premiums, but asked that they wait three days to draw the first premium, to coincide with his payday. The insurer drew the premium three days later, as requested. When did Miguel's policy take effect?
Emeka, a new insurance agent with Sunrise Insurance, meets with her client, Mosi. After analyzing Mosi's needs, Emeka determines that Mosi's current life insurance coverage with Starlight Insurance is more than sufficient. Nevertheless, she persuades Mosi to cancel his existing coverage and buy a new life insurance policy with Sunrise Insurance. She believes this is a good compromise because Mosi will have the coverage he needs, and the new transaction will pay her a commission. Which of the following offences did Emeka commit?
Barry, a life insurance agent, is meeting his client Diane who came to Canada 26 years ago. Diane is turning 60 years old and is considering purchasing a non-registered life annuity to supplement her retirement income. Barry presented the quote to her and it was quickly accepted. During the application process, he recorded Diane’s contact information, used her Social Insurance card to ascertain her identity, and collected a cheque of $120,000 from a joint account. The names written on the cheque were Diane and Geoffrey. Diane explained that this was a joint account with her brother. What should Barry do to comply with FINTRAC’s guidelines regarding ascertaining identity?
Callum is an agent with Neverland Insurance. It was recently discovered that he had been using a tied selling technique to double his sales with each client. Which one of the following organizations will take action against Callum’s conduct?
After working nine years as an insurance agent, Jamie decides to make a change in her life and go back to school. A colleague she used to work with on personal health insurance congratulates her and tells her that he will pay her a flat fee for every health insurance referral she makes to him, as long as the referral results in a sale. What could be said about this referral arrangement?
Last week, at a dinner party, Dario, an insurance agent, met Andrew, a successful businessperson with a net worth of over $10 million. Dario spent the evening following Andrew around, telling him how he could help him manage his finances. The day after the meeting, Dario sent a fruit basket to Andrew's office. Every day since, Dario has been calling and urging Andrew to meet with him and take advantage of his services and insurance products.
Which duties and obligations did Dario break?
Mike and Todd are both agents with Superior Insurance Company. Every Friday, they have lunch together at the local pub. One Friday, Mike forgets his wallet, so Todd pays both bills. Mike has a sales appointment that afternoon, where he will be signing a small term life insurance policy on a child. He decides to simply indicate that Todd is the agent of record so that Todd gets the compensation for the sale—an easy way to pay him back for lunch! What practice is Mike engaging in?
Josh is meeting with William, his financial advisor, to notify him of the death of his spouse, Linda, for whom he is the beneficiary. Josh is asking William what requirements are necessary for proof of claim on their life insurance policy. Which of the following documents/information are required by Josh to ensure that a proper claim is approved by the insurance company?
Harris is the father of Aden, Charlie, and Edmond. They are turning 29, 26, and 24 this year respectively. Harris purchased a life insurance policy with Aden as the life insured, Charlie as the successor owner, and Edmond as co-owner of the policy. He also named his wife, Becky, as the irrevocable beneficiary. Years have passed and the life insurance accumulated sufficient cash value. Harris is working out of town most of the time and none of the family members can get hold of him. One day, Harris encounters a car accident in another country and becomes unconscious. Becky and the children decide to cancel the policy and remit the cash value to Harris’s hospital. Which party can execute the intended transaction?
Levi is a newly licensed financial security advisor in Quebec City, meeting with Mason, the compliance officer at Yes Insurance Inc. Mason stresses the importance of being professional and complying with the code of ethics. Levi asks who enacted the code of ethics.
Which of the following is Mason's CORRECT response?
Josh is an established advisor who specializes in group benefits. He recently hired Bryan as a marketing manager. Bryan will be responsible for advertising and creating a social media platform for Josh's company. Among other things, Bryan is developing a monthly electronic newsletter, which he plans to email to potential and existing clients. However, because this is a brand new initiative, none of the would-be recipients has subscribed to the newsletter or asked to receive any such communication from Josh's company. What law should Josh and Bryan be mindful of before sending their newsletter?
Abishola purchases segregated funds from her insurance agent Bob. Before finalizing the transaction, she tells Bob that she will need the funds in a few months to make a down payment on a condo. Later, when Abishola calls to withdraw her funds, Bob informs her that she will incur a fee for withdrawing her funds prematurely. Abishola complains to Bob, and then to Bob's supervisor, without receiving a satisfactory response. To which organization can Abishola escalate her complaint?
It’s Friday afternoon and Olivier, an insurance agent, has just received the paper copy of his client’s insurance contract. Olivier is about to leave on a three-day weekend, and he's already late for his camping reservation. He wonders if he should delay his departure to deliver the document, or if it can wait until he gets back on Tuesday. How long does Olivier have to deliver the contract?
Kaamil meets with Omar, his insurance agent, to purchase a whole life insurance policy. Kaamil wants to name his wife Ofra as the irrevocable beneficiary of the policy. Before proceeding, which of the following considerations should Omar CORRECTLY ask his client to reflect on?
Josh is a successful insurance agent with Smart Insurance Inc. who mentors new agents and gives them tips on how to increase their client base. He tells Clarence, a new agent, that he should send an email to close friends and family members to explain the services that he now offers. Clarence is worried about sending unsolicited promotional emails because Firash, the compliance manager, had told him that the practice is not allowed. What legislation was Firash correctly referencing?
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TESTED 21 Feb 2026
