- (Topic 5)
(Harry, aged 60, recently sold his business and plans to invest $100,000 in segregated equity fund contracts. He wants to minimize costs but has a family history of early death.
What maturity and death benefit guarantees would be most appropriate?) A. 75%/75%
Correct Answer:
B
Given Harry??scost sensitivityandfamily health history, the75% maturity and 100
- (Topic 3)
Dora meets with the following clients, each of whom fills out a disability insurance application:
• Scott, a ski instructor who skydives every weekend in the summer,
• Lamar, a librarian who drives to work daily and spends his free time collecting stamps and watching nature shows,
• Timothy, an administrative assistant who walks 30 minutes each way to and from work, and
• Yashar, an accountant who participates in 5 online chess competitions a week and studies chess in his spare time.
All else being equal, which of Dora??s clients will qualify for the most favorable insurance premium?
Correct Answer:
B
Insurance premiums are typically based on risk factors such as occupation and lifestyle. Among the clients listed,Lamar, the librarian, has the lowest-risk lifestyle and occupation. Librarians are generally considered low-risk occupations for disability insurance, and his hobbies (collecting stamps and watching nature shows) carry no added risk factors. Scott??s high-risk activities (skiing and skydiving) would likely lead to higher premiums, while Lamar??s low-risk profile qualifies him for the most favorable premium, according to LLQP underwriting principles.
- (Topic 4)
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?
Correct Answer:
C
In the case of life insurance where a subrogated policyholder is designated, that individual (in this case, Natalya) would assume ownership rights of the policy upon the original policyholder??s death. Since Kirill named Natalya as the subrogated policyholder, she would become the new policyholder upon his death, regardless of the fact that Kirill did not have a will. This designation bypasses the estate, meaning the executor or other family members (like Katya) do not assume ownership. This outcome aligns with LLQP guidelines on succession planning and the assignment of life insurance ownership.
=================
- (Topic 3)
On February 15, 2015, Donald took out income replacement insurance with an accidental death and dismemberment rider of $50,000 and a critical illness insurance rider of $25,000. The policy wasissued on April 1, 2015. On April 10, 2015, his doctor tells him that the results of a urine analysis carried out at the end of March reveal a serious anomaly and refers him to an emergency urologist. On April 20, Donald is diagnosed with cancer of the right kidney, which is due to be removed on April 26. But, two days before the procedure, Donald dies in a car accident. What benefit amount will the estate receive?
Correct Answer:
C
Comprehensive and Detailed Explanation:
AD&D pays $50,000 for accidental death. CI ($25,000) requires surviving a 30-day waiting period post-diagnosis (April 20 to May 20); Donald died on April 24, so no CI benefit (Chapter 1:Financial Protection Provided by Accident and Sickness Insurance).
Option A: Incorrect; AD&D applies. Option B: Incorrect; CI not paid.
Option C: Correct; $50,000 AD&D only. Option D: Incorrect; CI not triggered.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 1:Financial Protection
Provided by Accident and Sickness Insurance.
- (Topic 5)
(Nancy has invested $100,000 in mining company stocks in her local area. To which of the following risks is Nancy most exposed?)
Correct Answer:
C
By investing heavily in asingle sector(mining), Nancy facesindustry risk. Industry-specific issues such as regulation changes, market conditions, or operational challenges could severely impact her investments.
Exact Extract:
"Industry risk is the risk that factors affecting an entire industry may negatively impact investments within that sector. Concentrating investments in a single industry increases exposure to this type of risk."
(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.4.9 Industry Risk)
