LLQP Exam Dumps - IFSE Institute Life License Qualification Program Questions and Answers

An accumulation annuity allows Garry to save and grow his investments over the next 10 years with deferred payments starting at retirement, matching his timeline and retirement goals.

Exact Extract:

"An accumulation annuity is used to accumulate savings over time. Payments commence at a later date specified by the investor (deferred payments)."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 3.2.1.2 Accumulation Annuity​)

According to the LLQP Segregated Funds and Annuities curriculum and regulatory requirements governing insurance-based investments, certain documents must be provided or completed at the time a segregated fund contract is sold. These requirements are designed to ensure client disclosure, informed consent, and compliance with anti–money laundering (AML) and consumer protection rules.

First, an information folder is mandatory. The LLQP study guide explains that insurers must provide clients with an information folder before or at the time the contract is issued. This folder outlines the nature of segregated funds as insurance contracts, explains guarantees, fees, risks, and the client’s right of rescission. Without this document, the disclosure requirement is not met.

Second, Fund Facts (also referred to in insurance as Fund Facts–like disclosure documents) must be provided for each segregated fund selected. These documents summarize key information such as investment objectives, historical performance, fees, and risks in a standardized format. The LLQP curriculum emphasizes that Fund Facts must be delivered before or at the point of sale, even if the final fund selection occurs during the meeting.

Third, a third-party determination form is required under AML legislation whenever there is a possibility that someone other than the client may be contributing funds or exercising control. Since the client is investing a lump sum and Travis has limited prior relationship with him, the third-party determination form must be completed to confirm whether the funds belong solely to the client or to someone else.

The other documents are not mandatory in this scenario. A Pre-Authorized Contribution (PAC) form is only required if the client chooses to set up automatic ongoing contributions, which has not been indicated. Annual audited financial statements are publicly available but do not have to be physically provided at the time of sale.

Therefore, based strictly on LLQP Segregated Funds and Annuities regulatory and disclosure requirements, the correct answer is Option C: 2, 3, and 4 only.

Given Pierre’s short life expectancy, a term annuity (paying for a specific period) would ensure he receives guaranteed payments for a fixed number of years, aligning with his situation and providing steady cash flow.

Exact Extract:

"A term annuity pays a fixed income for a set number of years. It is appropriate for clients expecting a limited lifespan and wishing to maximize payouts during their lifetime."

(Reference: Segfunds-E313-2020-12-7ED, Chapter 3.2.3 Duration of the Annuity【49:2†Segfunds-E313-2020-12-7ED.pdf**)

One of the significant advantages of segregated funds is creditor protection, which is particularly beneficial for business owners and professionals who may face potential claims from creditors. Under LLQP principles, segregated funds are insurance contracts, and when beneficiaries such as spouses or children are named, the investment may be protected from creditors in the event of bankruptcy or legal action. This makes segregated funds distinct from other investment types, which do not inherently offer creditor protection unless specific trusts or structures are in place​​.

Option A is incorrect as Assuris provides limited coverage rather than full protection, Option B is partially true but not unique to segregated funds, and Option D is incorrect as segregated funds typically do not require medical underwriting.

Under the LLQP Segregated Funds and Annuities curriculum, Lydia’s objectives clearly combine capital protection, growth potential, and estate planning considerations. She does not require income from the funds, wishes to preserve capital for her grandchildren, and wants the ability to lock in market gains over time. These criteria align most closely with segregated funds that include a reset feature.

Segregated funds are insurance-based investment products that provide market exposure while offering guarantees at maturity and upon death, typically at 75% or 100% of deposits (less withdrawals). This makes them particularly suitable for investors like Lydia who want to protect capital intended for heirs, even if markets decline before death. The LLQP study guide emphasizes that death benefit guarantees are a key advantage of segregated funds for estate planning, as they ensure a minimum payout regardless of market performance.

The reset feature is especially important in this scenario. A reset allows the contract owner to periodically “lock in” investment gains by resetting the guaranteed amount to the current market value. If markets perform well, Lydia can reset the guarantee, thereby increasing the protected amount for her beneficiaries. This directly meets her desire to capture long-term growth while safeguarding those gains against future downturns.

The other options do not meet all of Lydia’s requirements. A variable income annuity is designed to provide income, which Lydia does not need, and it does not allow access to capital for estate growth purposes. Index-based ETFs offer growth potential but provide no capital protection or guarantees. Market-linked GICs protect principal but typically cap upside growth and do not offer death benefit guarantees or the ability to reset guarantees over time.

The LLQP curriculum highlights segregated funds with reset features as an ideal solution for older investors with estate planning goals who want growth with downside protection. Therefore, the most appropriate investment for Lydia is segregated funds with a reset feature, making Option D the correct and fully verified answer.

Comprehensive and Detailed In-Depth Explanation: The CSF Code of Ethics (Section 11) prohibits advisors from denigrating competitors, requiring professionalism in client interactions. Alexandre can’t disparage the FinCode advisor despite the public disciplinary record. Option C—emphasizing his unique approach—focuses on his strengths, encouraging business ethically without criticism. Option A (check CSF records) indirectly highlights the competitor’s fault, risking denigration. Option B (departure dispute) introduces irrelevant negativity. Option D (past experience) could lead to prohibited criticism. The Ethics manual promotes positive differentiation over competitor critique, making C the compliant choice.

Comprehensive and Detailed In-Depth Explanation: Gold’s role as a financial security advisor, per the Distribution Act (Section 16), requires him to act competently and in the client’s best interest. Tax advice, wills, and mandates in case of incapacity (Civil Code, Articles 2166–2174) often exceed an advisor’s expertise, necessitating referral to specialists like tax experts and notaries. By not proposing such collaboration, Gold risks providing incomplete or inaccurate advice, breaching his duty of care to the client (option B). Option A (the public) is too broad, as no public harm is evident. Option C (other professionals) is unaffected, as no direct duty to them is breached. Option D (the profession) could apply indirectly via reputational harm, but the primary breach is to the client. The Ethics and Professional Practice manual mandates advisors to recognize their limits and refer clients appropriately.

Since Patricia did not modify the beneficiary designation on her life insurance policy after separating from Tim, he remains the named beneficiary. Under LLQP guidelines, the original beneficiary designation stands unless explicitly changed by the policyholder. This means that,despite Patricia’s remarriage and the birth of her child Cedrick, Tim remains the beneficiary and will receive the $100,000 death benefit​.

Beneficiary designations on life insurance policies are not automatically altered by life events such as marriage or the birth of a child. Therefore, in the absence of any updates, Tim remains the beneficiary as per Patricia's original designation​.

In Quebec, theChambre de la sécurité financière(CSF) is responsible for enacting and enforcing the Code of Ethics for financial security advisors. The CSF ensures that professionals, like financial security advisors, adhere to ethical standards and provide clients with competent and honest services​.

The Autorité des marchés financiers (AMF) oversees the financial market in Quebec, but the CSF specifically regulates the ethical conduct of financial advisors, including those selling life insurance and financial security products​.

Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:

TheIFSE Ethics and Professional Practice Course (Common Law)states that a life insurance policy’s coverage remains in effect during the grace period (typically 30 days) if the insured dies before it lapses. Albert died in July 2019 during the earthquake, within the grace period (ending August 15, 2019). The delay in finding his body or issuing the coroner’s report doesn’t negate the claim, as death occurred while the policy was active. Lapse after death (B, C) doesn’t apply, and reinstatement (D) is unnecessary since the claim is valid based on the death date. Stephen should file a claim, making A correct.