LLQP Exam Dumps - Life License Qualification Program (LLQP)

Term life insurance policies typically allow for renewal at the end of the term, but the premium is recalculated based on the policyholder’s age at renewal. Since Anastasia’s policy is a 10-year term, and she is now renewing it, her premiums will be higher due to her increased age, despite her good health. The policy will renew without medical underwriting, but it will be at an increased rate. Option A is incorrect, as the rate cannot remain the same. Option C, restarting the incontestability period, may happen but is unrelated to the premium question.Option D, shopping for a better rate, is an option but not directly tied to renewal.Therefore,Option Bis correct​​.

Comprehensive and Detailed Explanation From Exact Extract:

Non-convertible Term 10 insurance does not offer conversion privileges to permanent coverage. It can be renewed until age 80, after which it terminates. The LLQP explains that this type of coverage is useful for cost-sensitive business needs but has no flexibility for conversion or extension beyond its term cap.

To determine the amount of insurance needed for income replacement with a net shortfall of $30,000 per year, the calculation is as follows:

Calculate Gross Income Needed:Since Roman’s income needs to be adjusted for a 40% tax rate:

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Calculate Required Capital for Income Replacement:

Using the rate of return of 4%, the required capital is:

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Since the tax rate has already been considered in calculating the $50,000 gross income,Option B($750,000) would be suitable after double-checking the total requirement of post-tax income and aligning with the overall net shortfall for more conservative estimates.Correct answer after full calculation adjustments should beB. $750,000​​.

Comprehensive and Detailed In-Depth Explanation: Adèle seeks an immediate term annuity with payments starting in one month, funded by a lump sum. In annuity contracts (Civil Code, Article 2368), “alienation” means transferring capital ownership to the insurer, which then guarantees payments. Option A explains this: once Adèle’s $300,000 is alienated, the insurer assumes control, and with payments starting in one month, it’s in the payment phase (no significant accumulation). This aligns with an immediate annuity per the LLQP. Option B is incorrect—alienation means Adèle loses ownership, barring emergency access. Option C’s “deferred annuity” contradicts the one-month start. Option D misuses “capitalization phase” (growth period) for an immediate annuity already paying out. The Ethics manual requires advisors like Germain to clarify terms simply and accurately.

In a cross-purchase buy-sell agreement funded by life insurance, each shareholder purchases a life insurance policy on the lives of the other shareholders. Upon the death of a shareholder, the surviving shareholders use the proceeds from the insurance to buy out the deceased shareholder’s shares at the agreed value. Since each share is valued at $5,000, Alana's 100 shares would be worth:

100 shares×5,000=500,000100 \text{ shares} \times 5,000 = 500,000100 shares×5,000=500,000

Thus, Meaghan and Beatrice would collectively purchase Alana's shares from her estate, providing her estate with a total of$500,000. Each surviving shareholder will then own an additional 50 shares, resulting in each now holding 150 shares of Advanced Tech Inc. This option aligns with the principles of cross-purchase agreements discussed in the LLQP​​​.

Comprehensive and Detailed Explanation From Exact Extract:

Premiums are based on age, gender, health, and smoking status. Although twins share the same age and likely similar health, Rene’s status as a smoker increases his mortality risk and thus his premiums. LLQP clearly identifies smoking status as a major premium factor.

When considering surrendering a universal life (UL) policy, it is essential to understand the tax implications and any costs associated with surrender. Theadjusted cost basis (ACB)helps determine the taxable portion of the policy’s cash surrender value (CSV) because any amount received above the ACB may be subject to tax. Additionally,surrender chargescould reduce the CSV received upon surrender. Therefore, Ljubomir needs to collect both the ACB and any surrender charges applicable to Tanja's policy. These factors will help Tanja make an informed decision regarding the net amount she would receive from surrendering the policy and the potential tax liability​​​.

Comprehensive and Detailed In-Depth Explanation: An insurance contract under Quebec’s Civil Code (Articles 2389–2414) has distinct characteristics. It is a “contract of the utmost good faith”(uberrimae fidei), requiring full disclosure from both parties, especially the insured, about material facts (Article 2408). It is typically a “contract of adhesion,” as insurers offer standard terms with little negotiation (Article 1379), unlike mutual agreement contracts. It is “synallagmatic,” imposing reciprocal obligations—premium payment by the policyholder and coverage by the insurer (Article 1381). It is also “aleatory,” as the outcome depends on an uncertain event, like death or loss (Article 2390). Option C accurately reflects these traits. Option A’s “mutual agreement” suggests negotiation, which is rare in insurance. Option B and D incorrectly state that inaccurate statements are inconsequential—misrepresentations can void a policy (Article 2410)—and B’s “consensual” and D’s “gratuitous” misalign with insurance’s onerous nature (payment for coverage). The Ethics and Professional Practice manual emphasizes advisors’ duty to explain these legal characteristics clearly.