TNL : LLQP Practice Exam : A&S
4 - If there is a deficit and the insured decides not to renew the policy, the insured will be
billed for the final year's deficit.
Nicholas and Martin started their own company 30 years ago. The company has grown
substantially over the years and currently has annual sales in excess of $10,000,000 per
year. After looking at the various funding structures, they opted for refund accounting.
Which of the following statements is incorrect regarding refund accounting?
1 - If there are any deficits, the insurer will not be able to charge the company for the deficit
directly but can factor the deficit into the renewal premium.
2 - Another name for "refund accounting" is "retention accounting".
3 - The insurer will share any surplus if actual results are better than those that were
originally anticipated.
4 - If there is a deficit and the insured decides not to renew the policy, the insured will be
billed for the final year's deficit.
1 - These contracts represent a high risk to corporate cash flow.
Adam owns his own car dealership that specializes in cheap used cars. The dealership has
13 salespeople and 2 full-time secretaries. Adam is inquiring about group insurance for his
employees.
Which of the following would likely be the reason for Adam's not wanting an ASO contract?
1 - These contracts represent a high risk to corporate cash flow.
2 - Since ASO contracts do not usually require evidence of insurability from plan members,
this type of contract is offered only to large companies with a sufficient spread of risk.
3 - He has two secretaries that can handle the administrative duties themselves.
4 - An ASO contract requires the insured to handle all administrative details and is suitable
only for a company with a large human resources department.
1 - Hazardous sports questionnaire
Tim has been passionate about snowboarding ever since seeing Shaun White win a gold
medal at the 2018 Winter Olympics. Tim spends every Thursday, Friday, and Saturday on
the most difficult slopes at Whistler and Blackcomb mountains in British Columbia. He
spends approximately $350 on lift tickets every week and over $20,000 per year on
snowboard gear, accommodations, and travel. Tim is applying for insurance, and he has
received a request from the insurer for additional documentation.
Which of the following is Tim most likely being asked for?
1 - Hazardous sports questionnaire
2 - Confirmation of employment
3 - Inspection report
,4 - Confirmation of income
4 - None of the above
Mohammed immigrated to Canada a few years ago. While he worked as a doctor for many
years in his home country, he is unable to practice in Canada. He decided to become a
licenced insurance agent. While he is licenced to sell life insurance and accident and
sickness insurance, the majority of his income is generated by offering clients disability
coverage.
When meeting with a prospective client, George, Mohammed was impressed by many
framed pictures of George in various exotic destinations worldwide. George was most proud
of his latest adventure when he took a motorcycle trip through treacherous terrain throughout
the continent of Africa. George agrees that individual disability coverage is warranted and
decided to complete an application.
Given George's lifestyle, what reports or exams should Mohammed order?
1 - An attending physician's statement
2 - An inspection report
3 - A medical exam
4 - None of the above
3 - $15,000
Five years ago, Olivia bought a non-cancellable recurrent disability policy that offers residual
benefits, a COLA rider, a presumptive disability clause, a three- month elimination period,
and a maximum one-year benefit period. The maximum benefit is $2,500 per month. Earlier
this year, Olivia was on disability for nine months due to a brain tumour, which caused
severe headaches. While the brain tumour was inoperable, it was not expected to be
terminal and could be controlled with medication. During this time period, Olivia received
disability benefits. She returned to work, but three months later, the excruciating pain
resurfaced and prevented her from gainful employment. During her second disability, she
was unable to work for 15 months.
How much in total would she receive in benefits during the second disability?
1 - $30,000
2 - $22,500
3 - $15,000
4 - $0
2 - The health history of her parents
Ling-Ling works for a corporate training firm that specializes in teaching sales skills.
Ling-Ling runs marathons. She won a bronze medal for Canada at the 2016 Summer
Olympics in Rio and has twice been the Canadian national champion. Her ankles tend to get
a little sore when it is damp and cold outside. Her condition is fairly common among athletes
and does not concern her doctor. Other than this, she is in excellent health. She lost both of
her parents to serious illnesses in their mid-fifties. Her father died 3 years after being
, diagnosed with colon cancer, and her mother lost a battle with lung cancer. Ling-Ling
recognizes the need for disability insurance and has come to you to discuss her options.
What is the insurance company likely to have the biggest issue with?
1 - Her previous work history
2 - The health history of her parents
3 - Her current health
4 - Her current occupation
Most CI policies expire after the payment of a claim. Therefore, the policy is likely not in
force.
Frederick purchased a critical illness policy in 2017. The policy was a three-condition
contract. In 2020, he suffered a stroke, and after satisfying the applicable waiting period, he
received a lump sum benefit of $50,000, which he deposited into his bank account. The Cl
benefit allowed him to focus solely on his health and not worry about his financial situation
while he recovered. Frederick was recently diagnosed with life-threatening cancer, and he is
wondering if he will receive a second benefit under the policy.
What should you tell him?
3 multiple choice options
3 - $10,800
Harold earns a pre-tax income of $3,000 per month. He is applying for an individual disability
policy. Since he will be paying the premium with after-tax dollars, any benefits paid out by
the insurer would be received tax-free. The maximum benefit period is 12 months, with
benefits commencing after a 90-day elimination period has been satisfied.
Harold was disabled for nine months. How much would he receive in total benefits?
1 - $16,200
2 - $27,000
3 - $10,800
4 - $18,000
2 - Paula's request is outside of the 10-day free-look period. She can still cancel the policy
but will receive only the unused portion of the premium back.
Paula applied for an individual disability policy on June 5%. The policy was issued as applied
on June 10" and delivered to her on June 12". She purchased a non-cancellable policy with
a maximum two-year benefit period. On June 25M, Paula had a change of heart and wanted
to cancel the policy.
How would the insurer handle Paula's request?
1 - Under the right of rescission, Paula can cancel the policy and receive the entire premium
back.
2 - Paula's request is outside of the 10-day free-look period. She can still cancel the policy
but will receive only the unused portion of the premium back.
4 - If there is a deficit and the insured decides not to renew the policy, the insured will be
billed for the final year's deficit.
Nicholas and Martin started their own company 30 years ago. The company has grown
substantially over the years and currently has annual sales in excess of $10,000,000 per
year. After looking at the various funding structures, they opted for refund accounting.
Which of the following statements is incorrect regarding refund accounting?
1 - If there are any deficits, the insurer will not be able to charge the company for the deficit
directly but can factor the deficit into the renewal premium.
2 - Another name for "refund accounting" is "retention accounting".
3 - The insurer will share any surplus if actual results are better than those that were
originally anticipated.
4 - If there is a deficit and the insured decides not to renew the policy, the insured will be
billed for the final year's deficit.
1 - These contracts represent a high risk to corporate cash flow.
Adam owns his own car dealership that specializes in cheap used cars. The dealership has
13 salespeople and 2 full-time secretaries. Adam is inquiring about group insurance for his
employees.
Which of the following would likely be the reason for Adam's not wanting an ASO contract?
1 - These contracts represent a high risk to corporate cash flow.
2 - Since ASO contracts do not usually require evidence of insurability from plan members,
this type of contract is offered only to large companies with a sufficient spread of risk.
3 - He has two secretaries that can handle the administrative duties themselves.
4 - An ASO contract requires the insured to handle all administrative details and is suitable
only for a company with a large human resources department.
1 - Hazardous sports questionnaire
Tim has been passionate about snowboarding ever since seeing Shaun White win a gold
medal at the 2018 Winter Olympics. Tim spends every Thursday, Friday, and Saturday on
the most difficult slopes at Whistler and Blackcomb mountains in British Columbia. He
spends approximately $350 on lift tickets every week and over $20,000 per year on
snowboard gear, accommodations, and travel. Tim is applying for insurance, and he has
received a request from the insurer for additional documentation.
Which of the following is Tim most likely being asked for?
1 - Hazardous sports questionnaire
2 - Confirmation of employment
3 - Inspection report
,4 - Confirmation of income
4 - None of the above
Mohammed immigrated to Canada a few years ago. While he worked as a doctor for many
years in his home country, he is unable to practice in Canada. He decided to become a
licenced insurance agent. While he is licenced to sell life insurance and accident and
sickness insurance, the majority of his income is generated by offering clients disability
coverage.
When meeting with a prospective client, George, Mohammed was impressed by many
framed pictures of George in various exotic destinations worldwide. George was most proud
of his latest adventure when he took a motorcycle trip through treacherous terrain throughout
the continent of Africa. George agrees that individual disability coverage is warranted and
decided to complete an application.
Given George's lifestyle, what reports or exams should Mohammed order?
1 - An attending physician's statement
2 - An inspection report
3 - A medical exam
4 - None of the above
3 - $15,000
Five years ago, Olivia bought a non-cancellable recurrent disability policy that offers residual
benefits, a COLA rider, a presumptive disability clause, a three- month elimination period,
and a maximum one-year benefit period. The maximum benefit is $2,500 per month. Earlier
this year, Olivia was on disability for nine months due to a brain tumour, which caused
severe headaches. While the brain tumour was inoperable, it was not expected to be
terminal and could be controlled with medication. During this time period, Olivia received
disability benefits. She returned to work, but three months later, the excruciating pain
resurfaced and prevented her from gainful employment. During her second disability, she
was unable to work for 15 months.
How much in total would she receive in benefits during the second disability?
1 - $30,000
2 - $22,500
3 - $15,000
4 - $0
2 - The health history of her parents
Ling-Ling works for a corporate training firm that specializes in teaching sales skills.
Ling-Ling runs marathons. She won a bronze medal for Canada at the 2016 Summer
Olympics in Rio and has twice been the Canadian national champion. Her ankles tend to get
a little sore when it is damp and cold outside. Her condition is fairly common among athletes
and does not concern her doctor. Other than this, she is in excellent health. She lost both of
her parents to serious illnesses in their mid-fifties. Her father died 3 years after being
, diagnosed with colon cancer, and her mother lost a battle with lung cancer. Ling-Ling
recognizes the need for disability insurance and has come to you to discuss her options.
What is the insurance company likely to have the biggest issue with?
1 - Her previous work history
2 - The health history of her parents
3 - Her current health
4 - Her current occupation
Most CI policies expire after the payment of a claim. Therefore, the policy is likely not in
force.
Frederick purchased a critical illness policy in 2017. The policy was a three-condition
contract. In 2020, he suffered a stroke, and after satisfying the applicable waiting period, he
received a lump sum benefit of $50,000, which he deposited into his bank account. The Cl
benefit allowed him to focus solely on his health and not worry about his financial situation
while he recovered. Frederick was recently diagnosed with life-threatening cancer, and he is
wondering if he will receive a second benefit under the policy.
What should you tell him?
3 multiple choice options
3 - $10,800
Harold earns a pre-tax income of $3,000 per month. He is applying for an individual disability
policy. Since he will be paying the premium with after-tax dollars, any benefits paid out by
the insurer would be received tax-free. The maximum benefit period is 12 months, with
benefits commencing after a 90-day elimination period has been satisfied.
Harold was disabled for nine months. How much would he receive in total benefits?
1 - $16,200
2 - $27,000
3 - $10,800
4 - $18,000
2 - Paula's request is outside of the 10-day free-look period. She can still cancel the policy
but will receive only the unused portion of the premium back.
Paula applied for an individual disability policy on June 5%. The policy was issued as applied
on June 10" and delivered to her on June 12". She purchased a non-cancellable policy with
a maximum two-year benefit period. On June 25M, Paula had a change of heart and wanted
to cancel the policy.
How would the insurer handle Paula's request?
1 - Under the right of rescission, Paula can cancel the policy and receive the entire premium
back.
2 - Paula's request is outside of the 10-day free-look period. She can still cancel the policy
but will receive only the unused portion of the premium back.
