EMT Practice Test

1. Question Content...

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Question1: Patrick, an insurance of persons representative, gives a talk about his work to high school students. He tells them about his previous day's activities. Which activity is considered ethical misconduct?

Question2: Gold, a financial security advisor, recently met with a wealthy client who needed tax advice. The client also wanted to draft a will and a mandate in case of incapacity. Eager to meet his client's needs and make recommendations, he did not think it necessary to propose a meeting with the firm's tax expert and notary.
Towards whom has Gold breached his duties and obligations?

Question3: After meeting with his advisor Monica, Tom agrees to apply for a $50,000 whole life insurance policy.
Monica tells him that the monthly premium will be $40 per month. Monica is advised by underwriting that Tom qualifies for an additional $10,000 critical illness rider, and that the new premium would be $50 per month. Monica advises underwriting that Tom accepts the additional coverage without speaking with him first, because it is such a good deal and great coverage, he won't mind. When Tom finds out what she has accepted on his behalf, without his knowledge, he is upset and wants to lodge a complaint to someone other than the insurance company and Monica; he wants to speak with an independent third party. He finds the contact information for the local regulatory authority. What are some of the responsibilities the regulatory authority has in protecting clients like Tom?

Question4: France is a daycare owner who has an employer group benefits plan in place for her employees. During her annual renewal meeting with her insurance agent, she is told that the plan's rates are increasing by a surprisingly large percentage. Her agent explains that although most of her staff are young females in their
20s, the claims experience is higher than the industry norm. What amendment to the group plan could France' s agent suggest to help control the cost?

Question5: Surjit and Rajbir get married in 2010 and Surjit names Rajbir as the irrevocable beneficiary of his life insurance contract. In 2017, the couple divorces amiably and Surjit meets with his insurance representative, Ivan, to review his plans. Surjit tells Ivan that he would like to keep Rajbir as his beneficiary. What should Ivan counsel his client to do?

Question6: 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?

Question7: Miguel applied for a disability insurance policy nearly three months ago. He recently received notice from his agent that his application was approved, with an exclusion applicable to his lower back due to a prior injury.
The agent brought the exclusion amendment with the policy at the delivery appointment. Miguel signed and accepted it. He gave the agent a copy of a void cheque to set up direct billing for the premiums, but asked that they wait three days to draw the first premium, to coincide with his payday. The insurer drew the premium three days later, as requested. When did Miguel's policy take effect?

Question8: Adele retired a few months ago. She sold some of her assets and would like to use the funds to take out a term annuity to increase her retirement income. Adele brings a $300,000 cheque to Germain, her financial security advisor, and wants to begin receiving lifetime guaranteedbenefits in one month with the right to use capital in the event of an emergency. When Germain tells her about alienating capital, the capitalization phase, and the payment phase, Adele becomes confused and asks for clearer explanations. What can Germain say to help Adele understand?

Question9: Jane took out a $100,000 Term 20 life insurance policy on herself when she got her first baby. She does not work and has no group insurance coverage. Five years later, she got another two newborn babies and needed greater insurance coverage to support her children financially in case of her own death. Jane talked to her insurance agent about having more coverage and, rather than having multiple policies, she decided to have one policy for the total coverage amount. She made an application to the life insurance company to change the coverage from $100,000 to $300,000. She is still in good health and the request for change has been approved.
One year later, Jane took her own life after losing her husband in a tragic car accident. Based on the situation, how will the insurance company pay out the claim?

Question10: Elizabeth is a seasoned insurance agent. She meets with Harold, a new agent, to help him better understand the industry and the processes that they must follow. Elizabeth tells Harold about a body that administers the regulatory system applicable to insurance intermediaries. Which of the following is Elizabeth referring to?

Question11: Ontario residents, Juan and Maria, are a married couple approaching retirement. They have askedtheir representative Carlow to review the details of Maria's defined benefit plan (DBPP).
Which of the following statements about Maria's pension is CORRECT?

Question12: Sasha is an employee at PranaTech. The company offers all employees a pension plan. PranaTech must contribute into the plan, but employee contributions are not mandatory. Sasha chooses where his funds will be invested.

Question13: Joseph, a retired jeweler, meets with Larry, an insurance agent with Summit Life Co., to review Joseph's life insurance needs. Joseph has made it clear in his will that upon his death, his son will inherit his collection of diamond necklaces, valued at $1.8 million.
What type of asset is Joseph's diamond necklace collection considered to be?

Question14: Joshua took out key person disability insurance for his computer engineer, Younes. Monthly benefits after a
60-day waiting period amount to $5,000 a month for 12 months with a replacement expense benefit rider of
$2,500 a month. Following a ski accident, Younes remainedin a coma. It took Joshua six months to find a replacement with the same knowledge and skills as Younes. How much did Joshua receive from the insurer?

Question15: Group insurance and group annuity representative Zaheb recently sold a group insurance contract to Alumo Inc., a company that employs about 50 plant employees. This is the first time the company offers such a plan.
The employees are asking the company questions about how the prescription drug plan works. They are especially surprised to see that the plan covers very few of the brand name drugs often prescribed by their physicians. What should Zaheb do?

Question16: Hussein wants to purchase a segregated fund. He has been following the news and believes the pharmaceutical sector will take off soon, and he wants to purchase a fund that will capitalize on his market view. He understands market fluctuations and is comfortable with the level of risk involved because he would only need to access these funds in 20 years.
Which of the following would be the most appropriate fund for Hussein?

Question17: A few months ago, Urmish filed a complaint to the Autorite des marches financiers (AMF) about the services he received from his insurance agent, Jaba. The complaint was heard by the discipline committee, and Jaba was found guilty and ordered to pay a $10,000 fine. Jaba is upset and does not agree with the verdict. She would like to appeal the verdict.
Which of the following statements is CORRECT?

Question18: Diane is an insurance agent working for Gamma Insurance Inc. who is responsible for coaching a newly licensed agent, Wick. Wick has questions about his role, and he would like to know how he should service his clients.
What should Diane tell Wick about what is expected of him?

Question19: Laraine wants to purchase an Individual Variable Insurance Contract (IVIC) because of the death benefit guarantee as she has been ill. She has decided on a segregated fund which has, as its underlying asset, units of a mutual fund that invests in North American common shares. Her insurance agent, Jeffrey, wants her to understand key issues before she completes and signs the application. What should Jeffrey do?

Question20: Alexandre has just become a father. He wishes to take out a life insurance policy from Antoine, an insurance of persons representative. During their meeting, Alexandre mentions his love of mountain climbing. What should Antoine do?

Question21: Marsha and Alexis are equal partners in an advertising firm. They meet with Jose, an insurance agent, and Horacio, their lawyer, because they would like to protect themselves if one of them becomes disabled and unable to work for an extended period of time. At the end of their meeting, they agree to purchase $500,000 disability insurance policies on each other by each of them paying premiums.
What type of agreement do Marsha and Alexis have?

Question22: Barry, a life insurance agent, is meeting his client Diane who came to Canada 26 years ago. Diane is turning
60 years old and is considering purchasing a non-registered life annuity to supplement her retirement income.
Barry presented the quote to her and it was quickly accepted. During the application process, he recorded Diane's contact information, used her Social Insurance card to ascertain her identity, and collected a cheque of $120,000 from a joint account. The names written on the cheque were Diane and Geoffrey. Diane explained that this was a joint account with her brother. What should Barry do to comply with FINTRAC's guidelines regarding ascertaining identity?

Question23: 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?

Question24: Leonard and Ashley, a couple in their early 30s, meet with Howard, an insurance agent, to review their investment needs. Leonard earns $60,000 a year as a research physicist, and Ashley earns $25,000 as an actress. They each have $3,000 in their respective chequing accounts. Leonard also has $40,000 invested in his group registered retirement savings plan (RRSP). Ashley has a Subaru WRX worth $20,000 with a car loan of $10,000. Leonard does not own a car, but he has an outstanding student loan of $30,000.
What is the couple's net worth?

Question25: Edward and Shirley initiated a whole life insurance application for their daughter Christine when she was 15 years of age. As Christine was a student with limited income at the time, the agent set Edward and Shirley jointly as owning and paying the premiums of this policy. Edward was designated beneficiary. Who is the policyholder?

Question26: Aaliyah is a 37-year-old account manager at a large pharmaceutical company. She earns $300,000 a year plus bonuses. She meets with Theo, an insurance agent, to review her life insurance needs. Theo deduces that Aaliyah needs a $250,000 universal life (UL) insurance policy. Aaliyah agrees but states that she wants to keep her premiums low. Which of the following UL death benefit options would BEST suit her needs?

Question27: Joel and Gina, a 65-year-old couple, have just retired and are meeting with their advisor, Mark, to do some tax planning. Joel's annual income is $75,000, and Gina's is $35,000. His marginal tax rate (MTR) is 40% and hers is 26%. Mark discusses the advantages of income splitting with them. After their income split, their respective MTRs are 32% for Joel and 30% for Gina. How much income tax will Joel and Gina save if
$15,000 of Joel's income is transferred to Gina?

Question28: Anvi owns individual disability insurance that she purchased 5 years ago. At the time of application, she was a semi-professional boxer. Gamma Insurance Inc. offered her the disability policy with an exclusion stating that if she became disabled while boxing, the benefit would not be paid.
This week, while reviewing her insurance needs with Tyron, her insurance agent, she mentions that she retired from boxing and wants to know how, or if, this will affect her policy.
What should Tyron tell her?

Question29: Akeno is a 65-year-old retired accountant. He is divorced and has a 40-year-old son who is financially independent. Thanks to years of diligent savings, Akeno now enjoys a comfortable retirement. In addition to his pension income, he has over $300,000 invested in shares in his non-registered account. He lives in a mortgage-free home valued at $700,000 and owns a cottage valued at $500,000. The mortgage on the cottage is $100,000. Akeno purchased the homes 30 years ago when housing prices were low. It is important to him to donate $100,000 to the Alzheimer's Association when he dies. What is the GREATEST financial risk that would arise in the event of Akeno's death?

Question30: Cory is a recent college graduate who has just been hired by a marketing firm in an entry-level position. His employer group benefits only cover a short-term disability to a maximum of 119 days. He meets with an insurance agent to talk about disability coverage. To fully cover his salary, he would require a $3,000 monthly benefit. In reviewing options, he thinks that his ideal coverage of a 30-day waiting period and a "to age 65" benefit period comes at a cost that exceeds his budget. What recommendation should the insurance agent make to Cory regarding coverage?

Question31: Emma, an employee at MagicLand, is part of the company's group registered retirement savings plan (RRSP).
During her tenure, she accumulated over $70,000 in the plan and all of her contributions are invested in segregated funds. She meets with Jun to invest in an individual segregated fund. Jun tells her that there are some differences between group and individual segregated funds.
How are Emma's group segregated funds DIFFERENT from an individual segregated fund?

Question32: Jordan, a group insurance agent, meets with Nancy, a commercial berry grower in Saskatoon, to renew her company's group insurance plan. When the plan was established four years ago, Nancy had 20 employees.
She now has over 50 employees, many of whom are unhappy with the plan. Jordan wants to rectify this situation to everyone's satisfaction but is not sure how to begin.
Which of the following options indicates the first step that Jordan should take?

Question33: Callum is an agent with Neverland Insurance. It was recently discovered that he had been using a tied selling technique to double his sales with each client. Which one of the following organizations will take action against Callum's conduct?

Question34: Edna is a 62-year-old widow living in Quebec. She meets with Yolanda, her insurance agent. Ednaworked part-time her whole life as a seamstress and has no savings. Her husband Donald had been working as a greeter at the local box store until his death 2 months ago at the age of 67. Since his passing, Edna has been struggling financially. She would like to know which of the following organizations will immediately pay her a benefit?

Question35: Maeve is an Ontario resident. Fifteen years ago, she purchased a $250,000 whole life insurance policy and named her husband Guillaume as the primary beneficiary and her 4-year-old son Edwin as the contingent beneficiary. Last week, Tasha, Maeve's insurance agent called her to ask if she has had any life changes that would warrant a meeting to review her insurance coverage. Maeve informs her that over the last year she divorced Guillaume and that she is now living with her new boyfriend Eduardo. Tasha asks to meet Maeve to review her beneficiary designation. Who will receive Maeve's death benefit if she dies today?

Question36: Naomie meets with her new client, Keisha, to review her investment portfolio. Keisha is a 43-year-old sales representative who has been with Belmont Inc., a large pharmaceutical company, for 15 years. She earns a generous salary, plus bonuses. She also has a group tax-free savings account (TFSA) and a defined contribution pension plan (DCPP), all of which are invested in Belmont common shares.
What main need does Naomie have to address regarding Keisha's investments?

Question37: Isaac and Natasha, Quebec residents, were married 18 years ago. At the time, they visited a notary to get married under the "separation as to property" matrimonial regime and had indicated their wish to waive the application of the division of the patrimony by agreement. After experiencing a series of personal crises, the couple is now divorcing.
Which of the following assets, if any, will they have to separate when they divorce?

Question38: It's Friday afternoon and Olivier, an insurance agent, has just received the paper copy of his client's insurance contract. Olivier is about to leave on a three-day weekend, and he's already late for his camping reservation.
He wonders if he should delay his departure to deliver the document, or if it can wait until he gets back on Tuesday. How long does Olivier have to deliver the contract?

Question39: Axel owns a $150,000 whole life insurance policy with an accumulated cash surrender value (CSV) of
$20,000. His monthly premiums are $300, due on the fifth day of each month. Axel misses his November 5 premium payment and then dies a few weeks later, on November 20.

Question40: Marc, age 35, is a self-employed electrician. His annual income is approximately $60,000. His spouse Veronique works part-time and earns an annual income of $15,000. Marc and Veronique are parents of two young children. Their monthly financial obligations with regard to rent, car, clothing, and food amount to
$3,000. What accident and sickness insurance protection do Marc and Veronique primarily need?

Question41: After completing a thorough needs analysis, Dimitri, an insurance agent with Health Assure, recommends that his client Chandler purchase a deferred annuity contract and contribute monthly to a balanced segregated fund to build up savings that Chandler can use as retirement income. Dimitri explains to Chandler that the type of annuity contract he is recommending has two distinct phases.
What are those two phases?

Question42: On February 5, Ayla started working at Larson Group Inc. as an administrative assistant. Larson Group offers all employees a group health, dental and life insurance plan that commences after a 3-month waiting period.
On April 7, Ayla felt ill and drove herself to the hospital. The doctor diagnosed two clogged arteries and performed an emergency surgery. Ayla was unable to work for 2 months, then died of complications on June
9. Will the group insurance plan pay the death benefit?

Question43: Larson, an insurance agent, meets with Julia, a real estate agent, to review her insurance needs. Julia has $500 in her savings account and does not own a tax-free savings account (TFSA) or registered retirement savings plan (RRSP). She earns an average of $150,000 a year in sales commissions and rental income from two condo units she owns. The combined value of her income properties is $1,000,000, and the mortgage is
$200,000.
Larson recommends that Julia open a TFSA and use it to invest $400 a month in a money market fund.
Which of the following personal risks is Larson trying to mitigate with this advice?

Question44: Abishola purchases segregated funds from her insurance agent Bob. Before finalizing the transaction, she tells Bob that she will need the funds in a few months to make a down payment on a condo. Later, when Abishola calls to withdraw her funds, Bob informs her that she will incur a fee for withdrawing her funds prematurely.
Abishola complains to Bob, and then to Bob's supervisor, without receiving a satisfactory response. To which organization can Abishola escalate her complaint?

Question45: Three years ago, Douglas purchased a whole life insurance policy with numerous supplementary benefits and riders. Today, he meets with his doctor who informs him that he has late-stage colon cancer and has only a few months to live. Even with surgery, his chances of survival are low. Douglas calls his insurance agent, Penny, to ask her what he should do to obtain a benefit immediately.

Question46: Arianna has been an insurance agent with Ideal Life for over 15 years, always working hard to grow her client base and keep her existing clients happy. Last week, she prepared an elaborate insurance plan for Raphael, a potential new client. But when they meet, Raphael tells her he wants a second opinion. Arianna tells him that she cannot allow him to show or discuss details of her work with a potential competitor. She explains it's wrong for another agent to benefit from her work and knowledge.
Which of the following standards of conduct did Arianna contravene?

Question47: Planet Source decides to implement a defined contribution pension plan (DCPP) for its 75 employees. The company's president appoints Josie, the human resources director, as the plan administrator.
Which of the following BEST describes Josie's responsibility as a plan administrator?

Question48: Six years ago, when Kacey was working as an active firefighter, she purchased a $200,000 30-year term life insurance policy. At the time, the insurance company rated her policy. Recently, she changed roles and now works for the fire department's public relations office, answering media calls and filling out paperwork. She meets with her insurance agent, Bernice, to ask if the insurer would consider reducing her premiums.

Question49: Oscar is a chartered accountant who owns and operates his own firm, Tax Time Ltd., with the help of five employees. The provincial accountants' association offers group benefits plans to its members' firms. Oscar recently contacted the association to have a group benefits plan quoted and put in place for his firm. Who will be the plan sponsor?

Question50: Larissa is a 65-year-old retired marketing executive. She is single and has no dependents. Larissa accepted a generous retirement package from her employer five years ago and used her early retirement cash bonus to consolidate her financial affairs. She paid off mortgages on both her principal residence (a condo) and her vacation cottage. The fair market value (FMV) of the real estate increased significantly over the years. She named her sister Natalya as the sole beneficiary of her estate. In addition to the two properties, Larissa's estate includes a registered retirement savings plan (RRSP) and shares of Apple Inc. that she purchased in her tax- free savings account (TFSA) 10 years ago. If Larissa were to pass away today, which of her assets would be fully taxable on her final income tax return?

Question51: Becky opened a small bakery five years ago. Although she struggled at first, her business hasbecome increasingly successful. Until recently, she only had two full-time employees, but now she hired two more and relocated the store to a busier street. The rent is higher, and so are the profits. As the bakery expands, however, Becky is becoming increasingly concerned about what would happen to it if she became unable to work-even for just a few months-due to an illness or an injury. Which one of the following options would most suitably protect Becky's business against such a risk?

Question52: Melanie is a psychologist. She has her own practice and two employees. In her free time, she loves to dance but also enjoys skydiving, which she does three or four times a year. She meets with Sophie, an insurance agent, because she would like to purchase disability insurance. What should Sophie tell her?

Question53: Brian is a machinist. For the past seven years, he's worked for a company that offers a group benefits plan.
Under that plan, the premiums for long-term disability coverage are entirely paid by the employees. Last year, an injury forced Brian to stop working for eight months. After a four-month waiting period, during which he collected Employment Insurance (EI) benefits, Brian received long-term disability (LTD) benefits from the group plan's insurer. Brian is now preparing his income tax return and wonders about the tax implications of the different benefits he received while on disability. What statement accurately describes the tax treatment of Brian's EI and LTD benefits?

Question54: Luc is married and the father of two teenagers. His annual salary is $60,000. His wife Marie works part-time with an annual salary of $24,000. The family's monthly expenses are $3,500. Luc and Marie are not members of any group benefit plan. What is the minimum monthly amount of disability insurance coverage that Luc needs to cover his risk of disability?

Question55: Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem and only visits them sporadically. Vladimir's younger brother Sergei, on the other hand, is a dependable and helpful uncle who helps Svetlana regularly with the children.
Svetlana meets with Robert, an insurance agent to review her life insurance needs because she wants to make sure that her children are taken care of if she were to die prematurely. Robert suggests that she purchase a
$200,000 policy. Who should she name as a beneficiary?

Question56: Li Jun, 50, applies for a $250,000 critical illness (CI) insurance policy with his insurance agent Ming. On the application, Li Jun states that he must take pills daily to manage his hypertension. Aside from this, his health is good. Given his age and hypertension issue, he is worried that the insurer may refuse his application.
What does Ming CORRECTLY advise him?

Question57: Julie and Jim have been married for 16 years and decide to divorce. They draw up a list of property that will be partitioned based on the provisions of family patrimony: the family home, the cars, the RRSPs, and the benefits accrued with the RRQ during the marriage. What other items should be added to Julie and Jim's list?

Question58: Melissa owns a disability insurance policy from Clarity Life. She makes her premium payment on the second day of each month, but this month, she misses the payment deadline. A week passes before she realizes her oversight. She makes a frantic call to Jonathan, a Clarity Life customer service representative. Jonathan explains about notices of termination. Which of the following responses is CORRECT?

Question59: The primary and secondary beneficiaries of Rachel and Chad's joint first-to-die permanent life insurance policy are each other and their adult children, respectively. Within a year of Rachel and Chad's divorce, Rachel unexpectedly passes away. The policy beneficiaries remained as originally designated. Whose claim will be paid by the insurer?

Question60: 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?

Question61: Angus is involved in a motorcycle accident and due to his injuries has to spend a few nights in thehospital. He is released from the hospital with a doctor's note indicating that he is able to perform certain parts of his job, but that it would take months until he can be back to normal. He promptly calls his insurance agent Dawn to ask her if he would be entitled to his disability benefits. Dawn reads his policy and tells him that he will not receive any disability benefits.
Which disability definition is MOST LIKELY included in his policy?

Question62: Germain is a life insurance agent. This morning, he receives a call from Jason, whose wife, Rosalie owned a
$50,000 life insurance policy that she purchased from Germain seven years ago. Jason explains that Rosalie had a heart attack and died last week. Germain promises to help as much as he can.

Question63: Which organization provides protection for holders of segregated fund contracts in Canada if the insurer becomes insolvent?

Question64: Janice meets with Patrick, an insurance agent, to review her investment needs. Patrick suggests that she invest in segregated funds. Janice is not familiar with these types of funds.
What information can Patrick provide to Janice to help her understand the advantages of segregated funds?

Question65: Paola, an employee at Horizon Pharmaceuticals, was recently diagnosed with depression. She is unable to work and is receiving tax-free disability insurance benefits due to her condition. Paola is deeply indebted, and her creditors have been garnishing a portion of her pay for the last year. She is worried about her creditors also garnishing her disability benefit.
Can her disability benefits be seized by her creditors?

Question66: Everett is an insurance of persons representative who works exclusively for Moon Life Insurance. He wants to leave the company and become an independent representative. He knows that before he branches out on his own, he needs to ensure he has sufficient liability insurance.
Which of the following statements about his professional liability insurance is CORRECT?

Question67: Oliver, an insurance agent, meets with Roman and Julie. They are a married couple with a five-year-old son William. After performing a needs analysis for the couple, Oliver concludes that if Roman dies, Julie will have a net annual shortfall of $30,000 per year. Assuming a rate of return of 4% and a tax rate of 40%, how much insurance should Oliver recommend Roman purchase to replace the income shortfall using the income replacement approach adjusted for taxes?

Question68: Ziad, aged 34, was an elementary school teacher for several years. However, staffing cutbacks and his love of food have prompted him to go into business. He just purchased a pizza franchise (taking a $150,000 personal loan to finance the venture) and entered into a five-year lease for his business. Ziad owns a 20-year term life insurance policy with a face amount of $250,000. He is also covered for some benefits under his wife's group insurance plan, but knows he needs additional coverage. What type of accident and sickness coverage should Ziad purchase first?

Question69: Bethenny meets with Harrison, an insurance agent, to review her life insurance needs. Bethenny is a single mother of a 3-year-old daughter named Emma. Bethenny's main concern is that Emma istaken care of financially if Bethenny were to die prematurely. Emma's father Steve suffers from chronic alcoholism and is homeless. He has not been present in Emma's day-to-day life. After careful analysis, Harrison suggests that Bethenny purchase a $250,000 20-year term insurance policy. Given Bethenny's situation, who should she name as a beneficiary on her policy?

Question70: Xander fills out a life insurance application to purchase a $75,000 policy. The policy is accepted by the insurer and delivered to him on March 3. He pays the first month's premium upon receipt of the policy.
Unfortunately, on March 9, Xander loses his job and decides that he no longer wants the policy. What will be the consequence of this cancellation?

Question71: A group of high school students visits Jacques, a financial security advisor, as part of Career Day. A student wants to know what an insurance contract is. What will Jacques answer?

Question72: Konrad is the owner of CrossBoy, a manufacturing company employing over 50 employees. Konrad recently took out a $500,000 loan to expand his business. Terrence works as a sales manager and is responsible for roughly 40% of the company's revenue. Konrad recognizes the importance of Terrence's contributions to the success of the company. Therefore, in addition to a sizeable basesalary, CrossBoy also pays Terrence regular performance-based bonuses. Konrad understands that if Terrence dies prematurely, CrossBoy would suffer financially. What should he do to protect his company?

Question73: Anita is a 50-year-old woman who is thinking of purchasing a $150,000 permanent life insurance policy to pay for the capital gains tax that will be payable on her country home upon her death. She had purchased the home twelve years ago and wants to bequeath the property to her niece when she dies.
Which of the following features about a permanent insurance policy is TRUE?

Question74: Kalei owns a $250,000 life insurance policy with an accumulated cash surrender value of $75,000. She meets with her insurance agent Pamela to inform her that she quit her job last week. She wants to start an online business and needs $40,000 to fund the inventory and cover her living expenses for a few months. She heard that it was possible to obtain a loan using her policy at a 5% interest rate. Which of the following statements about collateral assignment is CORRECT?

Question75: Valerie, age 42, recently left her job after 15 years of service. She participated in a defined contribution pension plan and had accumulated benefits amounting to $88,000, eligible for transfer into a registered contract. What must Valerie do with this money?

Question76: Emery is a healthy wife and mother of two who spends her days caring for her children and volunteering at the local food bank. Emery would like to purchase disability insurance coverage because she is worried about how she would be able to take care of her family if she becomes disabled.
What type of disability policy, if any, is likely to be issued to her?

Question77: Cecilia, a licensed life insurance agent, delivers a life insurance policy to her client Tony, a newly landed immigrant. Tony would like to pay the policy using the pre-authorized monthly payment method. However, he does not have a bank account in Canada yet and doubts he could find the time to open one in the next few days. Cecilia offers to open a savings account for him, but Tony is unsure whether she is licensed to do that.
What should Cecilia tell Tony to reassure him that she can open a savings account on his behalf?

Question78: Alex, aged 35, has worked for many years as a salesman in a small used car dealership. He earns $70,000 a year. He has no group insurance at work and no individual insurance. Single and without children, his priority is to save enough money to retire at age 60. He makes regular contributions to his RRSPs, in which he has accumulated $400,000. He owns a condo valued at $250,000 on which he has an uninsured mortgage of
$150,000. What financial risk is Alex most exposed to?

Question79: Mike and Todd are both agents with Superior Insurance Company. Every Friday, they have lunch together at the local pub. One Friday, Mike forgets his wallet, so Todd pays both bills. Mike has a sales appointment that afternoon, where he will be signing a small term life insurance policy on a child. He decides to simply indicate that Todd is the agent of record so that Todd gets the compensation for the sale-an easy way to pay him back for lunch! What practice is Mike engaging in?

Question80: Samya and Gary, who are both insurance representatives, are having lunch together. Gary has been very successful for several years and proposes a scheme to Samya to get insurance proposals signed for a fictional company they would create together. He believes that this system would make them millionaires in about ten years. Gary advises Samya to keep their conversation a secret. If Samya agrees to Gary's proposal, what sanctions could she face?

Question81: Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael what she should do.

Question82: Dakota is the owner of Fresh Drapes, a home decoration company. She opened her business five years ago when she quit her day job, took out loans, and put all her life savings into opening her store. Her business is doing well, so she meets with Tanya, an insurance agent, to start investing for her retirement. After completing a thorough needs analysis, Tanya suggests that Dakota purchase segregated funds and name her husband as the beneficiary of the funds.
Which of the following offers the GREATEST benefit to Dakota by investing in segregated funds over other types of investments?

Question83: Monique meets with Tyra, an insurance agent, to review her insurance needs. Tyra explains the different types of policies and asks Monique for more information on her sources of income and expenses to properly evaluate her needs.
Which document should Tyra review to better understand Monique's sources of income?

Question84: Pierre is an insurance of persons representative. His new client, Carole, wishes to buy life insurance but wants to know everything about life insurance products before making a choice. What are Pierre's responsibilities in this case?

Question85: Last month, Suzanne purchased a life insurance policy from a local agent. The agent told her that the policy would accrue a cash value that she could draw from in her retirement years and that the premium would never increase. After recently meeting with a close friend, who is a retired insurance advisor, she was dismayed to learn that what was sold to her is in fact a term policy with no cash value. If Suzanne wishes to make a formal complaint against the agent, which authority can assist her in doing so?

Question86: Bernadette, a 27-year-old single woman, earns $78,000 annually as a production assistant. She meets with Howard, her insurance agent, to purchase an accidental death and dismemberment insurance contract.
Bernadette fills out the application form, the application is accepted, and the effective date is the date of acceptance of the application. Why is the effective date of Bernadette's policy the same as the date of acceptance?

Question87: Rene, age 39, is a framing carpenter at a company that builds doors and windows. He has group disability insurance equivalent to 60% of his annual salary, which is $70,000. His monthly living expenses are $3,500.
Since he has no pension plan at work, Rene has enrolled in an individual RRSP through payroll deductions ($1,000 per month). His RRSP savings currently amount to $45,000. In addition, Rene has $10,000 in a non- registered savings account. What should Rene's life insurance agent advise him?

Question88: Karine receives $200,000 from her mother's estate and decides to purchase an annuity. Her insurance agent Serge goes over her options with her, and she chooses the annuity that best suits her needs. Serge proceeds with the transaction.
Which of the following statements about the transaction is TRUE?

Question89: Alec is sure he sent his insurer his annual life insurance premium payment. The insurer did not receive it, however. The insurer then sent Alec a notice of non-payment of premiums, but Alec had moved in the meantime. Therefore, he never got the notice, even though he had emailed hisfinancial security advisor, Olivier, to inform him of his change of address. Unfortunately, Olivier was on a leave of absence and no one else in the firm took over the file. As a result, the policy lapsed. Alec sent Olivier's firm several emails to complain, but no one responded. Which organization can Alec turn to?

Question90: Molly took out a disability insurance policy. A few years after the purchase, she severely injured her back and was unable to work. She immediately filed a claim with her insurer to start receiving benefits. The insurer asked for an attending physician's statement (APS) describing her condition and stating when that condition started. Why is it important for the insurer to know on what date Molly became disabled?

Question91: Dorothy, age 36, is an architect. She runs her own office with the help of two assistants. She owns her own condo, has an active social life, and travels regularly for pleasure. She has a net annual income of approximately $125,000, once all the business, rent, salary, and car expenses have been paid. Dorothy is well aware of the significant financial problems that she would face for any absences from the office due to illness or disability. What are Dorothy's main protection needs in this respect?

Question92: Abraham lives in Alberta. He meets with a life insurance agent to discuss the purchase of an individual extended health insurance plan. Abraham is interested in a plan that would cover him, his wife, and their two young children. Here are some of the features of the plan that most closely meets Abraham's needs:
prescription drug coverage with a $50 annual deductible and 80% co-insurance, and dental coverage with a
$100 deductible and 70% co-insurance on preventative services. However, Abraham asks the agent to present a plan with a cheaper premium. What changes would the agent have to consider in order to present a plan with a lower premium than the one described above?

Question93: Nikolai owns a guaranteed renewable individual disability policy that he purchased last year. The policy pays a monthly benefit of $3,000 and includes a 4-month waiting period and a 5-year benefit period. Today, he is diagnosed with prostate cancer and learns he must undergo 6 months of radiation.
When should he contact the insurance company to inform them of his diagnosis?

Question94: Levi is a newly licensed financial security advisor in Quebec City, meeting with Mason, the compliance officer at Yes Insurance Inc. Mason stresses the importance of being professional and complying with the code of ethics. Levi asks who enacted the code of ethics.
Which of the following is Mason's CORRECT response?

Question95: When Tim and Patricia were common-law spouses, they met with an insurance agent, Aelia, to purchase life insurance policies of $100,000 each, naming each other as beneficiaries of their policies. Five years later, Patricia leaves Tim to be with her personal trainer, Thomas. A year later, Patricia and Thomas marry, and Patricia gives birth to their baby, Cedrick. Tragically, just before Cedrick's 12th birthday, Patricia dies in a fiery car crash. She never modified her beneficiary designation.
Shortly after the crash, Thomas calls Aelia to inform her that Patricia has died and that he wants to claim the death benefit on her life insurance policy.
Who will receive the $100,000 death benefit?

Question96: Genevieve and Martin, a couple in their 40s, meet with Melissa, their insurance agent, to help them plan for their retirement. Melissa tells them that they would benefit from opening a spousal registered retirement savings plan (RRSP) given their financial situation and discrepancy in theirincomes. The couple would like to know the benefits of opening a spousal RRSP.

Question97: Andre, an insurance agent, meets with his client Jasper to discuss his $150,000 whole life insurance policy.
Jasper is deeply indebted and needs at least $40,000 to cover his debt. Andre tells him about a company he knows that will be willing to give him $75,000 if he assigns his policy to them. Did Andre act appropriately?

Question98: 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?

Question99: Luisa owns a balanced segregated fund currently valued at $50,000. Her mother Linda is the current revocable beneficiary of the policy. However, Luisa has been dating Benjamin for a year and would like to name him as the new beneficiary of her policy.
Which of the following statements about modifying the beneficiary designation is CORRECT?

Question100: Vasu, an insurance agent, meets with Francine, his new client. Francine wants to purchase a disability insurance policy. Vasu helps her complete the application form. In the process, he collects all the required medical and lifestyle information on his client and wonders what he must do with the information he collected.
Which of the following options is CORRECT?

Question101: Caleb meets with Miles, his insurance agent, to invest for his retirement. Caleb tells Miles that he will not need his funds for the next 25 years, he is comfortable with market fluctuations, and he would like a fund that mimics the S&P/TSX Composite index.
Which of the following funds will best suit Caleb's needs?

Question102: Kadiha invested $10,000 in a balanced fund 10 years ago, which she put into a non-registered account. At the time, her insurance agent sold her the fund with a 75% maturity and death benefit guarantee. Today, when the fund expires, the market value is $5,000.
How much will Kadiha receive, and how will her funds be treated for tax purposes?

Question103: Arthur is a 79-year-old long-term care (LTC) policyholder whose daughter, Sheila, visits daily to help him get dressed and prepare meals. Sheila wants him to enter a nursing home because heisunable to dress himself.
Though he cannot prepare his own meals, he can still feed himself, and once undressed, he can wash himself, seated in the bathtub.
Is Arthur eligible to receive LTC benefits?

Question104: Patricia is a laboratory technician who normally earns $4,000 a month. A few months ago, she injured her leg rollerblading and was unable to work for four months. Since she owns a disability insurance policy with a residual benefit option, she received $2,400 a month from the insurer. Now that she is recovered, her doctor has cleared her to slowly return to work. Since she cannot work her regular full-time hours, her pay has decreased to $3,000 a month.
How much will she receive from her residual benefit when she returns to work?

Question105: Last year, Ezekiel purchased a $100,000 life insurance policy and named his wife Jolene as an irrevocable beneficiary of the policy. Last week, Ezekiel returned home early from a business trip and decided to surprise his wife instead of calling ahead. He arrived at midnight and not wanting to wake her, entered the house from the back door and left the lights off. Not expecting the intruder to be her husband, Jolene stabbed him in the heart with a kitchen knife. She quickly realized her mistake and called 911. Unfortunately, Ezekiel died in the hospital from his wounds. The police deemed Ezekiel's death as accidental, and no charges were filed. Will the insurer pay the death benefit?

Question106: Insurance of persons representative Flavie meets with Julius to analyze his needs. At the end of the meeting, Flavie makes another appointment to present the results of the analysis and the proposed strategies. She hands Julius her business card, which says: "One of the company's 10 best salespersons at your service!" Flavie even adds that she is the office's top salesperson and earns more than $250,000 a year in commissions and bonuses. What changes should Flavie make for her representation practices to comply with the obligations of an insurance of persons representative?

Question107: Marcel is 16 years old and attends a boarding school in Ontario. He is a resident of New Brunswick and lives there with his parents in the summer months. After a recent family death, his father has been reviewing the family's life insurance coverage and suggests that Marcel apply for a policy on himself. He tells his son that he will pay the premium while he remains a student. Since Marcel won't be home for some time, his father asks him to meet with an agent in Ontario to apply for coverage. Which one of the following statements is correct regarding Marcel's application?

Question108: Josh is a successful insurance agent with Smart Insurance Inc. who mentors new agents and gives them tips on how to increase their client base. He tells Clarence, a new agent, that he should send an email to close friends and family members to explain the services that he now offers. Clarence is worried about sending unsolicited promotional emails because Firash, the compliance manager, had told him that the practice is not allowed. What legislation was Firash correctly referencing?

Question109: Chloe is a newly licensed financial security adviser. She is diligently learning about the profession and wants to do her job properly. She wonders when she is required to renew her certificate.
Which of the following answers is CORRECT?