Rene and Christine are 42-year-old twins. They are currently in the middle of a career change and
have decided to become entrepreneurs by buying a food franchise.
They are both in excellent health and only Rene is an average smoker.
In setting up the financial structure of their business, they each decided to take out a $400,000 10-
year term life insurance policy, designating each other as irrevocable beneficiary.
What can we say about the premiums for the life insurance policies that will be issued?
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Correct Answer:
D
Q: 2
(Suzie began her career with a large law firm five years ago. She earns an excellent income and saves
$5,000 annually through a financial advisor. Her advisor placed her in a conservative fund within a
TFS
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Correct Answer:
B
Q: 3
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?
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Correct Answer:
B
Q: 4
Francis owns a $250,000 insurance policy with an accidental death and dismemberment (AD&D)
rider. Francis calls his insurance agent Andrew to inform him that he permanently lost the use of his
right hand. He explains to Andrew that his brother shot him when he broke into his brother’s house
to recover a gold watch that was rightfully his. Francis wants to know how much he will receive from
his AD&D rider.
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Correct Answer:
D
Q: 5
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.
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Correct Answer:
B
Q: 6
Candace, an insurance agent, met with her client Rebecca on March 15th to complete a life insurance
application form. Rebecca applied for a T-10 $200,000 life insurance policy, she told Candace that she
will wait for her policy to be accepted before making a premium payment. On April 10th, the
application was accepted by the insurance company and Candace promptly called Rebecca to give
her the good news. Candace delivered the policy to Rebecca on April 15th during the meeting,
Rebecca gave Candace a cheque to cover her first premium and a void cheque to cover subsequent
premium payments. Candace submitted the cheques to her manager on April 21st. When did
Rebecca’s policy come into force?
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Correct Answer:
C
Q: 7
Dale meets with his last appointment of a busy workday. He is helping his client Larry fill out a
disability insurance claim form. Larry suffered a heart attack a week ago and is at home recuperating.
Larry will be unable to work for the next 6 months and needs the benefits as soon as possible to
cover his expenses. The at-home appointment takes a little longer than scheduled and Dale finds
himself rushing to his son’s big hockey tournament. In his haste, he puts Larry’s form in his briefcase
and subsequently forgets to submit the form. Which responsibility did Dale breach?
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Correct Answer:
D
Q: 8
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?
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Correct Answer:
B
Q: 9
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?
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Correct Answer:
D
Q: 10
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?
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Correct Answer:
C
Q: 11
Angela works in a biomedical research lab where she has been assigned to discover possible
antidotes to the anthrax virus. While the discovery process of testing possible antidotes would
expose her to the deadly virus, she is excited about the assignment.
Knowing that anthrax can be contracted through infected food, air, or contact with skin, what risk
management strategy would Angela employ by wearing protective gear over her mouth and skin?
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Correct Answer:
D
Q: 12
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.
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Correct Answer:
C
Q: 13
Aari and Jonila are a married couple in their late sixties. They both enjoy a comfortable retirement.
Both receive regular payments from their pension plans, Old Age Security (OAS) and Canada Pension
Plan (CPP). They own a house and a cottage that are both mortgage-free. They also have over
$500,000 in savings and investments. They know that if one of them dies, the surviving spouse will
be financially comfortable. The couple has two grown children to whom they would like to leave all
their assets when they die. The couple informs Herbert, their insurance agent, that they want to
make sure when they die that their children have the funds needed to pay the taxes on the assets
that they will bequeath them.
Which life insurance policy would be most suited to meet the couple's needs?
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Correct Answer:
A
Q: 14
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?
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Correct Answer:
C
Q: 15
Josh is an established advisor who specializes in group benefits. He recently hired Bryan as a
marketing manager. Bryan will be responsible for advertising and creating a social media platform for
Josh's company. Among other things, Bryan is developing a monthly electronic newsletter, which he
plans to email to potential and existing clients. However, because this is a brand new initiative, none
of the would-be recipients has subscribed to the newsletter or asked to receive any such
communication from Josh's company. What law should Josh and Bryan be mindful of before sending
their newsletter?
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Correct Answer:
B
Q: 16
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?
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Correct Answer:
C
Q: 17
Kaamil meets with Omar, his insurance agent, to purchase a whole life insurance policy. Kaamil wants
to name his wife Ofra as the irrevocable beneficiary of the policy. Before proceeding, which of the
following considerations should Omar CORRECTLY ask his client to reflect on?
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Correct Answer:
D
Q: 18
Goran and Tanja married two years ago. Last year, they purchased and moved into a three-bedroom
house in the suburbs. The current balance on their mortgage is $655,000. They meet with Ljubomir,
an insurance agent, to purchase a joint term life insurance policy to cover the mortgage. When
Ljubomir asks about their existing coverage, Goran shares that he has none. Tanja explains that she
owns a universal life (UL) policy with a level death benefit of $50,000 and a cash surrender value
(CSV) of $5,000, purchased 6 years ago from another agent. Tanja would like to surrender her UL
policy and use the $5,000 CSV to pay for a trip to Europe. What additional information about Tanja's
UL policy does Ljubomir need to collect?
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Correct Answer:
B
Q: 19
Mark and Jesse had a joint life insurance policy which they purchased on the advice of their
insurance agent, recognizing that if one of them died, the other would need an insurance benefit to
pay off their mortgage and for final expenses. Coverage is $450,000. Last week their car went off the
road in a snowstorm. Both were declared dead at the scene. The two had named their adult nephew,
Louis, as contingent beneficiary. What is the amount of the benefit the insurer will pay Louis?
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Correct Answer:
B
Q: 20
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?
