- (Topic 3)
Vincent, aged 55, plans to retire 10 years from now after a 40-year career with the federal government. He will then receive a federal pension and will benefit from a retiree health plan. His wife Catherine is 15 years younger than him. Vincent also has an RRSP that he intends on using in part to fund his travel plans in retirement, and in part to leave a lump sum to Catherine for her living expenses after he dies. Vincent has planned his budget carefully and feels confident that he has thought of everything. What may Vincent??s insurance agent suggest he consider to safeguard his retirement?
Correct Answer:
B
Comprehensive and Detailed Explanation:
Vincent??s pension and health plan cover income and basic health needs. LTC insurance protects his RRSP from depletion due to care costs, ensuring funds for travel and Catherine??s inheritance (Chapter 4:Insurance to Protect Savings).
Option A: Unnecessary; retiree health likely covers medications. Option B: Correct; LTC preserves savings.
Option C: Redundant; retiree plan covers hospital stays. Option D: Irrelevant; he??s retiring, not working.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 4:Insurance to Protect Savings.
- (Topic 5)
(Vanessa, a grandmother, wants to set up a savings account for her six-month-old granddaughter Brienne??s future education, making a lump sum and regular contributions.
Which account is best suited?)
Correct Answer:
C
ARegistered Education Savings Plan (RESP)is specifically designed to fundeducation savingsand allows contributions for a named beneficiary (Brienne), making it the perfect choice.
Exact Extract:
"An RESP is an education savings plan sponsored by the government, providing grants and tax-deferral advantages for beneficiaries saving for post-secondary education." (Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11.3 Group Plans and Registered Education Savings Plans)
- (Topic 3)
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?
Correct Answer:
A
Critical illness (CI) insurance pays a lump-sum benefit upon diagnosis of a covered illness, but typically requires the insured tosurvive for a specified period(often 30 days) following the diagnosis. Although Dominic suffered a heart attack, he did not die immediately. However, he passed away within the 30-day survival period following the heart attack, which is a common requirement in CI policies for benefit payment. Since the survival requirement was not met, the benefit will not be paid. Generally, in such cases, the insurer may refund premiums if specified in the policy, but the CI benefit itself would not be payable.
- (Topic 4)
Nathalie worked for 25 years as an administrative assistant at a manufacturing company. When she left the company 10 years ago, she transferred the money that she accumulated from the company??s pension plan into a locked-in retirement account (LIRA). Now she is 60 years of age and would like to withdraw the money from the LIRA.
Under which of the following circumstances would Nathalie be allowed to withdraw her funds?
Correct Answer:
B
Under the rules governing Locked-In Retirement Accounts (LIRAs) in Canada, which apply similarly across provinces including Ontario, there are specific circumstances under which a person may access funds prior to the usual retirement age. In general, LIRA funds are intended to be kept locked-in until a specified retirement age. However, early withdrawal is permitted if the account holder becomes disabled and has a reduced life expectancy, as stated in LLQP materials. Thus, Nathalie??s disability and reduced life expectancy would qualify her to withdraw from the LIRA. Moving to another location, retiring, or collecting QPP benefits do not generally permit early withdrawal from a LIRA.
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- (Topic 4)
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?
Correct Answer:
A
Dario??s conduct at the dinner party and afterward constitutes a breach of his duties and obligations towards the public. Insurance professionals are expected to maintain high standards of professionalism and respect the privacy and comfort of individuals they interact with. By persistently following Andrew and subsequently pressuring him with daily calls and unsolicited gifts, Dario failed to demonstrate respect for personal boundaries. This behavior could be seen as unprofessional and could harm the public??s trust in the industry. According to LLQP guidelines and ethical standards, agents must avoid aggressive solicitation and respect the autonomy and privacy of the public.
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