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

Under the rules governing Locked-In Retirement Accounts (LIRAs) in Canada, which apply similarly across provinces including Ontario, there are specific circumstances under which a person may access funds prior to the usual retirement age. In general, LIRA funds are intended to be kept locked-in until a specified retirement age. However, early withdrawal is permitted if the account holder becomes disabled and has a reduced life expectancy, as stated in LLQP materials. Thus, Nathalie’s disability and reduced life expectancy would qualify her to withdraw from the LIRA. Moving to another location, retiring, or collecting QPP benefits do not generally permit early withdrawal from a LIRA​​.

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Comprehensive and Detailed In-Depth Explanation: In life insurance, the policyholder owns the contract and has the authority to change the beneficiary, per the Civil Code of Quebec (Article 2425). Claudie’s mother, as the policyholder, must submit a written request to the insurer to designate Marc-André as the new beneficiary, making option A correct. Option B is incorrect because the beneficiary (Claudie’s mother) has no control over changing the designation—only the policyholder does. Option C is wrong, as the insured (Claudie) has no inherent right to alter the beneficiary unless she is also the policyholder, which she is not. Option D misstates the goal—Claudie wants a beneficiary change, not a policyholder change. The Ethics and Professional Practice manual stresses that advisors must ensure clients understand policy ownership rights and procedures for beneficiary changes.

Beneficiary changes in insurance contracts generally become effective once the insurer receives and processes the signed change form. This is supported by LLQP material, which specifies that changes to beneficiary designations must be documented and received by the insurer for the new designation to take effect. Since Linda is a revocable beneficiary, Luisa can make this change without requiring Linda's consent​​.

Option B is incorrect as revocable beneficiaries do not require consent for changes. Option C is too general, and D is incorrect because a formal written change form is typically required.

A specialty fund would be the most suitable option for Hussein, given his specific interest in the pharmaceutical sector. Specialty funds focus on specific sectors or industries, allowing investors to capitalize on particular market views and trends. Hussein's belief in the potential growth of the pharmaceutical sector and his comfort with market fluctuations over a long investment horizon aligns well with a specialty fund. According to LLQP, specialty funds are suited for investors seeking exposure to specific industries and who are willing to accept the higher risk associated with concentrated investments​.

Option A (Bond fund) does not align with Hussein’s interest in the equity market, particularly in the pharmaceutical sector. Options C and D (Balanced and Target date funds) are not focused on a specific sector and instead offer broader diversification across asset classes.

An impaired life annuity would be the best option for Thien given his health condition and reduced life expectancy. Impaired life annuities offer higher payouts compared to standard life annuities because they take into account the reduced life expectancy due to a serious health condition. This type of annuity provides an opportunity for individuals with significant health issues to receive increased income during their retirement years. According to LLQP resources, impaired annuities are designed specifically to address the needs of clients with severe health concerns by offering enhanced benefits that align with their specific life expectancy​​.

Options A, B, and C are standard annuity options that would not take Thien’s specific health impairment into account and therefore would not maximize his retirement income as effectively as an impaired life annuity.

Since Hana is not highly knowledgeable about investments and prefers a simple approach that includes both stocks and bonds, a Balanced Fund would be appropriate. Balanced funds are designed to provide a mix of stocks and bonds, which offers both growth potential and income stability. This aligns well with Hana’s objectives for a diversified and easy-to-understand investment suitable for retirement. LLQP materials note that balanced funds offer simplicity and diversification, making them suitable for investors who seek moderate risk and diversification without the need for detailed investment knowledge​.

Bond funds, dividend funds, and target date funds each have unique advantages, but they do not offer the same balanced exposure to both stocks and bonds that Hana seeks. Bond funds focus primarily on fixed-income assets, dividend funds on equity income, and target date funds adjust over time rather than maintain a fixed allocation of stocks and bonds throughout the investment period.

Due to Jessica's reduced life expectancy, an impaired life annuity would provide higher monthly payments than a standard life annuity. This type of annuity takes her medical condition intoaccount, offering larger payouts based on a shorter expected payment period. LLQP resources recommend impaired life annuities for individuals with significant health issues, as these provide better income compared to other types​​.

Options A and C offer a fixed period but don’t maximize monthly income for someone with a reduced life expectancy. Option B would provide a standard income for life but not the potentially enhanced income from an impaired annuity.

Mohammed’s plan allows him to make contributions that are not tax-deductible, and he is also not taxed on withdrawals, indicating that his employer’s plan is a group TFSA. In a TFSA, contributions are made with after-tax dollars, and withdrawals (including any growth) are tax-free, consistent with the LLQP outline on TFSAs. This is distinct from other retirement accounts, such as RRSPs, which provide tax deductions on contributions but tax the withdrawals as income​​.

Options A, B, and D are incorrect because these plans involve different tax treatments where contributions may be tax-deductible, and withdrawals are generally taxable.

It is a regulatory requirement for the client, Kimeni, to acknowledge receipt of the Fund Facts document when purchasing segregated funds. This ensures that he has been informed about the key aspects of the investment, such as fees, risks, and performance, prior to purchase. LLQP guidelines mandate that documentation like Fund Facts must be provided to clients and that they acknowledge receipt to confirm informed consent​.

Option A is incorrect as the document must be delivered before the purchase. Option C is inaccurate as the document can be delivered in various formats, not exclusively electronic. Option D is incorrect because it is the agent’s responsibility to provide the document, not the client’s to request it.

As a plan administrator for a defined contribution pension plan (DCPP), Josie’s primary responsibility is to manage the pension plan, which includes overseeing day-to-day operations, ensuring regulatory compliance, and handling communications with plan members. According to LLQP, plan administrators are tasked with ensuring the effective management and administrationof the plan, rather than setting benefit structures or addressing funding issues, which are typically responsibilities of the employer​​.

Options B, C, and D describe responsibilities typically held by the employer or plan sponsor, not the administrator.