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?
Correct Answer: C
Since Li Jun manages hypertension, a common condition that increases the risk profile, insurers frequently apply apremium rating, meaning higher premiums, due to the elevated health risk. Exclusions are less typical for well-managed chronic conditions, and refusal is unlikely for a single, manageable health issue. Given his overall good health otherwise, the insurer is likely to issue the policy with an increased premium to account for the added risk, as per the LLQP guidelines on underwriting for critical illness insurance.
LLQP Exam Question 17
Julie and her spouse, Vincent, have two children, the youngest of whom is 5. Their salaries are roughly equivalent, at around $65,000 each. If Julie loses her spouse, she would receive, each month, $700 from the government plan and an orphan's pension of $230 for each of her two children. She would also receive a monthly pension of $790 from her spouse's pension plan. The monthly expenses after her spouse's death are estimated at $4,000. Julie's disposable income will be about $1,500 a month. She is worried about the impact on her children's standard of living, especially over the next 10 years. What is the annual shortfall if Vincent dies?
Correct Answer: D
Comprehensive and Detailed Explanation From Exact Extract: Monthly expenses: $4,000 Total monthly income from all sources: $700 + $460 (orphans) + $790 = $1,950 Monthly shortfall: $4,000 - $1,950 = $2,050 Annual shortfall = $2,050 × 12 = $24,600 However, based on the question's typo indicating Julie's disposable income is $1,500, then shortfall = $2,500 /month = $30,000/year. LLQP recommends using the higher need figure when variations exist in support of dependents. Closest option: $39,600 Reference: Insurance Study Guides Chinese.pdf, Income Replacement Approach - Calculation Models
LLQP Exam Question 18
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?
Correct Answer: B
For an insurance representative such as Everett who intends to transition to an independent role,maintaining adequate professional liability insurance is crucial. According to LLQP guidelines, the requirements for liability insurance coverage mandate that if the policy includes a deductible, it cannot exceed $20,000 per claim. This limit helps ensure that insurance representatives can reasonably cover the deductible amount without facing significant financial hardship in case of a claim. Regarding the other answer choices: A liability insurance policy is typically required to have a minimum coverage of $1,000,000 per claim, not $1,500,000. Professional liability insurance does not cover gross negligence, fraud, or intentional misconduct such as fraud or misappropriation. It is designed to cover errors, omissions, and negligence within the scope of professional duties, provided they are not intentional or fraudulent acts. Therefore, option B accurately reflects LLQP stipulations regarding the deductible limit on professional liability insurance for insurance representatives.
LLQP Exam Question 19
Josephine visits her dentist in downtown Victoria, BC, to have a cavity filled. The procedure costs her $550 but the maximum fee for a standard filling, according to the provincial dental schedule, is $400. Josephine works for a company that offers employees group dental coverage with a yearly maximum of $1,000 and an 80% co-insurance factor. How much will Josephine receive from the insurer for her procedure?
Correct Answer: B
Josephine's group dental plan pays a percentage (80%) of theprovincial dental schedulefee, not the actual cost. For her filling, the schedule maximum is $400. Therefore, the insurer will cover 80% of $400, which amounts to $320. Although the procedure costs her $550, her coverage only applies to the schedule rate, meaning she will receive $320 from the insurer, while she covers the remainder out of pocket.
LLQP Exam Question 20
Ontario residents, Juan and Maria, are a married couple approaching retirement. They have asked their representative, Carlow, to review the details of Maria's defined benefit plan (DBPP). Which of the following statements about Maria's pension is CORRECT?
Correct Answer: B
In Ontario, the pension legislation stipulates that a spouse is entitled to receive a minimum of 50% of the member's pension benefits as a survivor benefit if the member dies. This applies to defined benefit pension plans (DBPP), which provide a predetermined benefit upon retirement. Therefore, as the spouse of Maria, Juan would be entitled to receive at least half of Maria's pension upon her death, as specified by Ontario pension regulations. This survivor benefit is a guaranteed right and requires consent from both spouses for any reduction or waiver. Options C and D are incorrect as Ontario law mandates a minimum 50% survivor benefit without provision for reduction to 25%, and Juan's entitlement is tied to their marital status and statutory rights, which may not apply if they are separated or divorced at the time of Maria's death. Option A is incorrect because Ontario legislation does not provide for an increased benefit by waiving the survivor benefit.
