Life Insurance, BC Canada( HLLQP
STUDY)
----------------Seg fund--------------------------------- - ANS-
3 factors that contribute to the coverage needed for Against Temporary Loss of Income -
ANS-1.Earned income (active income), 2.Other source of disability benefits, 3.Tax bracket.
Note: the benefit payment amount is ""monthly"" ›Be care full when reading the question
-Annual income or monthly income?
3 Levels of government - ANS-Federal, provincial, and Minicipal. h
3 non-Forfeiture ( loss of payment ability ) options for WL policy - ANS--Reduced paid-up
insurance (RPU)
-Extended term insurance (ETI)
-Automatic premium loan (APL)
Each option provides the policy owner with a way of maintaining insurance coverage.Cash
surrender value forfeits insurance coverage.
3 phrases of Against Permanent Loss of income( Income earner dies) - ANS-Readjustment
period, Dependency Period, Survivor life income needs
3 sections of Completing Application Form - ANS-1. Personal information of the insured
2. Medical Information of the life insured
3.Product details
5 + Factors that affect the morbidity rate - ANS-1 .Age,
2 .Gender,
3. Smoking status,
4 .Occupational Classification, and
5. other factors such as claims history, motivation, stability
5 conditions to meet to "activate" a life insurance - ANS-1.An insurable interest placed upon
the life insured by the insured
-General rule , life insured's death should have a harmful impact (financial) on the policy
owner's life
-Oneself , spouse , children, employees
-The beneficiary and assignee doesn't need a insurable interest on the life insured
2.Suitable type of contract
Two party Vs. Three party
Joint-first-to-die Vs. Joint-last-to-die Unilateral contract
Only the insured can cancel the contract ( unless fraud involved)
3.Name a beneficiary
Revocable
Irrevocable
,Estate
Contingent beneficiary (secondary)
4. Settlement option
5.Choose a UL Death Benifit
A managing general agent - ANS-facilitates business b/w agents, their client, and insurers by
providing support, such as sales, training and other support services.
A&S Accident and sickness insurance - ANS-It provides extra protection on top of our
provincial medical service plan:
-Extended health care
-Travel assistance
-Prescription drug plans
-Dental plans
A&S Individual and GROUP INSURANCE - ANS--AD&D( Accidental death and
dismemberment
-disability
-drug insurance
-critical illness-CI
-long time care-LTC
Absolute assignment - ANS-is essentially the transfer of ownership of a policy.
Accelerated death benefits=living benefits - ANS-When accelerated death benefits are
added to a life insurance policy, the insurance company will
pay out a portion of the death benefit prior to death of the life insured, if certain conditions
are met.
Accelerated death benefits are sometimes also referred to as living benefits.
Accumulating fund - ANS-study 4.6
Acting in good faith - ANS--client's best interest, consists of duty of care, integrity,
competence( client expects agents to know the product)
active management - ANS-manager makes the investment decisions and does not mirror an
underlying index.
adjusted cost base ( acb) - ANS-is the cost of life insurance policy for tax purposes. the life
insurance company calculates the acb and informs the policyholder of the acb amount. the
larger acb the lower the tax becuz the policy gain is smaller.
Advocis - ANS-provide professional association of advisors in canada.
after tax of rate of return - ANS-=rate of return x ( 1- tax rate )
Agent's role during application, help client - ANS-›understand the contract
›Ensure all information exchanged is true without misunderstanding -Fraudulent
misrepresentation / material misrepresentation
›Constructive notice -All information delivered to the agent from the client are considered
received by the insurer
›Time is of the essence
an agency relationship - ANS-when authority is delegated ( sent or represent) to another
person.
anniuity - ANS-at least 85%
, in case insurer go bankroup, how much you are gurantee to recieve , which every is the
greater, $2000 or 85% section 3.1.5
Annuity rates - ANS-The annuity rate does not change over the life of the contract. The rate
includes costs to the insurer, including any commissions payable to the agent.
annutilization
refer tax book 7.10.2 - ANS-csb-acb x marginal tax rate
ASO-adminstrative services only - ANS-refers to a plan structure where the employer itself
funds the benefits for employees rather than purchasing insurance from an insurance
company
Assuris - ANS-protects consumer from insurance company failure, financial backstop.
Assuris guaranteed - ANS-›Death benefits -Up to 200,000 or 85% of the original amount but
not less than 200,000
›CSV/account value -Up to 60000 or 85% of the original amount but not less than 60000
›Annuities, disability income, long-term-care -Up to 2000 or 85% of original amount
whichever is greater
›CI, travel insurance, and other health plan -Up to $60,000 or 85% of the original amount
whichever is greater
›Non-registered accumulation policies -100% of the accumulated value up to 100,000
›Segregated funds -Coverage up to 60000, 85% coverage on the"" guaranteed"" amounts
Attribution rules - ANS--between a parent and minor child
-For example, When parents invest funds for a minor child, any interest or dividends earned
on the investments by the children are attributed back to the parents. However, any capital
gains or losses are not attributed back but taxed in the hands of the child.
So if Carla wants to avoid paying income taxes on the investment she is making for her son,
she should avoid investment options that distribute interest and dividends, and should select
the fund that only distributes capital gains.
Automatic Premium Loan. - ANS-When missed premium will trigger this automatic premium
loan.
Without the necessity of the policy owner taking any action, the automatic premium loan
charges premiums as a policy loan against the cash surrender value of the policy to continue
insurance coverage. It can be used until the policy owner recommences premium payment
or until the amount of the loan plus interest equals the cash surrender value of the policy.
Capital gain - ANS-Taxable capital gain = （Fair market value - ACB )/2
Only half the gain is taxed
Some may subject to life time capital gain exemption (800,000+) ›Qualified small business
corporation (QSBC) ›Qualified farm and fishing properties
Capital retention approach - ANS-Today's value of income needs + cash needs = insurance
needs
STUDY)
----------------Seg fund--------------------------------- - ANS-
3 factors that contribute to the coverage needed for Against Temporary Loss of Income -
ANS-1.Earned income (active income), 2.Other source of disability benefits, 3.Tax bracket.
Note: the benefit payment amount is ""monthly"" ›Be care full when reading the question
-Annual income or monthly income?
3 Levels of government - ANS-Federal, provincial, and Minicipal. h
3 non-Forfeiture ( loss of payment ability ) options for WL policy - ANS--Reduced paid-up
insurance (RPU)
-Extended term insurance (ETI)
-Automatic premium loan (APL)
Each option provides the policy owner with a way of maintaining insurance coverage.Cash
surrender value forfeits insurance coverage.
3 phrases of Against Permanent Loss of income( Income earner dies) - ANS-Readjustment
period, Dependency Period, Survivor life income needs
3 sections of Completing Application Form - ANS-1. Personal information of the insured
2. Medical Information of the life insured
3.Product details
5 + Factors that affect the morbidity rate - ANS-1 .Age,
2 .Gender,
3. Smoking status,
4 .Occupational Classification, and
5. other factors such as claims history, motivation, stability
5 conditions to meet to "activate" a life insurance - ANS-1.An insurable interest placed upon
the life insured by the insured
-General rule , life insured's death should have a harmful impact (financial) on the policy
owner's life
-Oneself , spouse , children, employees
-The beneficiary and assignee doesn't need a insurable interest on the life insured
2.Suitable type of contract
Two party Vs. Three party
Joint-first-to-die Vs. Joint-last-to-die Unilateral contract
Only the insured can cancel the contract ( unless fraud involved)
3.Name a beneficiary
Revocable
Irrevocable
,Estate
Contingent beneficiary (secondary)
4. Settlement option
5.Choose a UL Death Benifit
A managing general agent - ANS-facilitates business b/w agents, their client, and insurers by
providing support, such as sales, training and other support services.
A&S Accident and sickness insurance - ANS-It provides extra protection on top of our
provincial medical service plan:
-Extended health care
-Travel assistance
-Prescription drug plans
-Dental plans
A&S Individual and GROUP INSURANCE - ANS--AD&D( Accidental death and
dismemberment
-disability
-drug insurance
-critical illness-CI
-long time care-LTC
Absolute assignment - ANS-is essentially the transfer of ownership of a policy.
Accelerated death benefits=living benefits - ANS-When accelerated death benefits are
added to a life insurance policy, the insurance company will
pay out a portion of the death benefit prior to death of the life insured, if certain conditions
are met.
Accelerated death benefits are sometimes also referred to as living benefits.
Accumulating fund - ANS-study 4.6
Acting in good faith - ANS--client's best interest, consists of duty of care, integrity,
competence( client expects agents to know the product)
active management - ANS-manager makes the investment decisions and does not mirror an
underlying index.
adjusted cost base ( acb) - ANS-is the cost of life insurance policy for tax purposes. the life
insurance company calculates the acb and informs the policyholder of the acb amount. the
larger acb the lower the tax becuz the policy gain is smaller.
Advocis - ANS-provide professional association of advisors in canada.
after tax of rate of return - ANS-=rate of return x ( 1- tax rate )
Agent's role during application, help client - ANS-›understand the contract
›Ensure all information exchanged is true without misunderstanding -Fraudulent
misrepresentation / material misrepresentation
›Constructive notice -All information delivered to the agent from the client are considered
received by the insurer
›Time is of the essence
an agency relationship - ANS-when authority is delegated ( sent or represent) to another
person.
anniuity - ANS-at least 85%
, in case insurer go bankroup, how much you are gurantee to recieve , which every is the
greater, $2000 or 85% section 3.1.5
Annuity rates - ANS-The annuity rate does not change over the life of the contract. The rate
includes costs to the insurer, including any commissions payable to the agent.
annutilization
refer tax book 7.10.2 - ANS-csb-acb x marginal tax rate
ASO-adminstrative services only - ANS-refers to a plan structure where the employer itself
funds the benefits for employees rather than purchasing insurance from an insurance
company
Assuris - ANS-protects consumer from insurance company failure, financial backstop.
Assuris guaranteed - ANS-›Death benefits -Up to 200,000 or 85% of the original amount but
not less than 200,000
›CSV/account value -Up to 60000 or 85% of the original amount but not less than 60000
›Annuities, disability income, long-term-care -Up to 2000 or 85% of original amount
whichever is greater
›CI, travel insurance, and other health plan -Up to $60,000 or 85% of the original amount
whichever is greater
›Non-registered accumulation policies -100% of the accumulated value up to 100,000
›Segregated funds -Coverage up to 60000, 85% coverage on the"" guaranteed"" amounts
Attribution rules - ANS--between a parent and minor child
-For example, When parents invest funds for a minor child, any interest or dividends earned
on the investments by the children are attributed back to the parents. However, any capital
gains or losses are not attributed back but taxed in the hands of the child.
So if Carla wants to avoid paying income taxes on the investment she is making for her son,
she should avoid investment options that distribute interest and dividends, and should select
the fund that only distributes capital gains.
Automatic Premium Loan. - ANS-When missed premium will trigger this automatic premium
loan.
Without the necessity of the policy owner taking any action, the automatic premium loan
charges premiums as a policy loan against the cash surrender value of the policy to continue
insurance coverage. It can be used until the policy owner recommences premium payment
or until the amount of the loan plus interest equals the cash surrender value of the policy.
Capital gain - ANS-Taxable capital gain = （Fair market value - ACB )/2
Only half the gain is taxed
Some may subject to life time capital gain exemption (800,000+) ›Qualified small business
corporation (QSBC) ›Qualified farm and fishing properties
Capital retention approach - ANS-Today's value of income needs + cash needs = insurance
needs
