LLQP Free Practice Test

- (Topic 5)
Owen meets with his insurance agent, Rachel, to review his investments. Owen is interested in segregated funds. In particular, he wants to know more about the reset feature.
What should Rachel tell Owen about resetting his funds?

1. A. All segregated funds offer a reset feature.
2. B. The reset feature may be automatic.
3. C. There is no additional cost for a fund that provides a reset feature.
4. D. The reset feature can be used if the market value increases or decreases.

Correct Answer: B
Rachel should inform Owen that some segregated funds offer an automatic reset feature, which adjusts the guaranteed value periodically based on the fund??s market performance. This can lock in gains during rising markets without requiring manual intervention. According to LLQP resources, automatic resets can occur on specific anniversaries or under certain conditions specified in the contract.
Option A is incorrect as not all segregated funds offer a reset feature. Option C is incorrect as there may be costs associated with funds that provide reset options. Option D is incorrect because resets typically lock in gains, not losses.

- (Topic 5)
(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?)

1. A. No-load
2. B. Front-end load
3. C. Deferred sales charge
4. D. Trailing commission

Correct Answer: A
Ano-loadsegregated fund hasno sales charge on entry or exit, making it ideal for short- term investment needs. Clara would retain full liquidity without penalties.
Exact Extract:
"No-load segregated funds allow investors to redeem their units without incurring a sales charge, making them ideal for investors who may require liquidity within a short timeframe." (Reference:Segfunds-E313-2020-12-7ED, Chapter 2.3.2.3 No Sales Charge)

- (Topic 2)
Samir applied for a life insurance policy 18 months ago. At the time of the application, he was employed as an accountant. Samir quit his accounting job 6 months ago to become a professional scuba diver.
Which of the following statements about Samir??s life insurance policy is CORRECT?

1. A. Samir must inform his insurer about his change of occupation within 6 months of the change.
2. B. Samir is not required to declare his change in occupation because the policy is less than 2 years old.
3. C. Regardless of whether Samir informs his insurer of his change in occupation, if he dies while scuba diving, he would not be covered.
4. D. Samir has no obligation to notify the insurer of his change of occupation regardless of how old the policy is.

Correct Answer: D
In life insurance policies, once the policy is issued, the insured does not need to notify the insurer of any changes in occupation. The premiums and coverage are based on the occupation and risk profile at the time of application, and life insurance contracts do not generally require updates on occupational changes unless explicitly stated.
Therefore, regardless of Samir??s current job as a scuba diver, his life insurance policy remains in force without the need for notification to the insurer. This is different from disability insurance, which may consider occupation changes to reassess risk and benefits.
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