Molly took out a disability insurance policy. A few years after the purchase, she severely injured her back and was unable to work. She immediately filed a claim with her insurer to start receiving benefits. The insurer asked for an attending physician's statement (APS) describing her condition and stating when that condition started. Why is it important for the insurer to know on what date Molly became disabled?

Vincent, aged 55, plans to retire 10 years from now after a 40-year career with the federal government. He will then receive a federal pension and will benefit from a retiree health plan. His wife Catherine is 15 years younger than him. Vincent also has an RRSP that he intends on using in part to fund his travel plans in retirement, and in part to leave a lump sum to Catherine for her living expenses after he dies. Vincent has planned his budget carefully and feels confident that he has thought of everything. What may Vincent’s insurance agent suggest he consider to safeguard his retirement?

Marcel is 16 years old and attends a boarding school in Ontario. He is a resident of New Brunswick and lives there with his parents in the summer months. After a recent family death, his father has been reviewing the family's life insurance coverage and suggests that Marcel apply for a policy on himself. He tells his son that he will pay the premium while he remains a student. Since Marcel won't be home for some time, his father asks him to meet with an agent in Ontario to apply for coverage. Which one of the following statements is correct regarding Marcel's application?

Surjit and Rajbir get married in 2010 and Surjit names Rajbir as the irrevocable beneficiary of his life insurance contract. In 2017, the couple divorces amiably and Surjit meets with his insurance representative, Ivan, to review his plans. Surjit tells Ivan that he would like to keep Rajbir as his beneficiary. What should Ivan counsel his client to do?

Chloe is a newly licensed financial security adviser. She is diligently learning about the profession and wants to do her job properly. She wonders when she is required to renew her certificate.

Which of the following answers is CORRECT?

Last month, Suzanne purchased a life insurance policy from a local agent. The agent told her that the policy would accrue a cash value that she could draw from in her retirement years and that the premium would never increase. After recently meeting with a close friend, who is a retired insurance advisor, she was dismayed to learn that what was sold to her is in fact a term policy with no cash value. If Suzanne wishes to make a formal complaint against the agent, which authority can assist her in doing so?

Harris is the father of Aden, Charlie, and Edmond. They are turning 29, 26, and 24 this year respectively. Harris purchased a life insurance policy with Aden as the life insured, Charlie as the successor owner, and Edmond as co-owner of the policy. He also named his wife, Becky, as the irrevocable beneficiary. Years have passed and the life insurance accumulated sufficient cash value. Harris is working out of town most of the time and none of the family members can get hold of him. One day, Harris encounters a car accident in another country and becomesunconscious. Becky and the children decide to cancel the policy and remit the cash value to Harris’s hospital. Which party can execute the intended transaction?

Mercedes is a single mother to her 5-year-old son Arthur. Arthur's father Richard is not in his son's life because he is a recovering drug dealer who spent the last 4 years in and out of prison. Mercedes has full custody of Arthur and cannot count on help from her family because they live in another province.

Wanting to ensure his well-being, in the event of her death, Mercedes purchases a $100,000 life insurance policy and names Arthur the sole beneficiary of the policy.

If she died without a will who would receive the death benefit?

Larry, an insurance agent, meets with Ethan, a freelance photographer, to review his insurance needs. Larry tells Ethan that he wants to collect all pertinent financial information to prepare a net worth statement for Ethan.

Why does Larry want to prepare Ethan’s net worth statement?

Last week, at a dinner party, Dario, an insurance agent, met Andrew, a successful businessperson with a net worth of over $10 million. Dario spent the evening following Andrew around, telling him how he could help him manage his finances. The day after the meeting, Dario sent a fruit basket to Andrew's office. Every day since, Dario has been calling and urging Andrew to meet with him and take advantage of his services and insurance products.

Which duties and obligations did Dario break?

Abraham lives in Alberta. He meets with a life insurance agent to discuss the purchase of an individual extended health insurance plan. Abraham is interested in a plan that would cover him, his wife, and their two young children. Here are some of the features of the plan that most closely meets Abraham’s needs: prescription drug coverage with a $50 annual deductible and 80% co-insurance, and dental coverage with a $100 deductible and 70% co-insurance on preventative services. However, Abraham asks the agent to present a plan with a cheaper premium. What changes would the agent have to consider in order to present a plan with a lower premium than the one described above?

Paul is a self-employed props person in the film industry. A year ago, he purchased disability insurance with an accidental death and dismemberment (AD&D) rider. During a film shoot, the wood floor of the film set catches fire due to his negligence and he loses sight in one eye. Hisdoctor prescribes complete rest for five months. How will the insurer compensate Paul under the circumstances?

Joshua took out key person disability insurance for his computer engineer, Younes. Monthly benefits after a 60-day waiting period amount to $5,000 a month for 12 months with a replacement expense benefit rider of $2,500 a month. Following a ski accident, Younes remainedin a coma. It took Joshua six months to find a replacement with the same knowledge and skills as Younes. How much did Joshua receive from the insurer?

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?

Rowan works for a construction company that employs 40 employees. The company is newly established, and the owners have yet to implement a group insurance policy. Rowan falls off theside of a building and breaks his collar bone. The doctor informs him that he will be unable to work for five months.

Who will pay him disability benefits while he is recuperating?

Amani owns Amani's Passions, an eco-friendly cosmetics company she started in her garage three years ago. The business is booming—so much so that Amani's Passions recently hired over 20 employees to keep up with demand. Now Amani wants to set up a group insurance plan for her staff.

Whose role is it to solicit quotes from insurers and put the right plan in place?

Sabrina is an insurance representative with an insurance of persons certificate issued by the Autorité des marchés financiers (AMF). Her client, Stephanie, is a Quebec resident who accepted a job with Service Canada, in Ottawa, and purchased a condo there. Stephanie calls Sabrina to explain that her new job requires her to work in Ottawa three days per week, but she is still a Quebec resident; she spends four days a week with her family in Granby, Quebec. Stephanie asks Sabrina if she can buy mortgage insurance from her to help cover the mortgage on her new condo.

What should Sabrina answer her?

Eloise has critical illness coverage through her group insurance plan at work. She is 54 years old, in excellent health, and is planning to retire soon. She meets with Sonia, her insurance agent, to plan her retirement and to make sure she will still be covered in the event of critical illness. To make sure she is not a burden on her family, Eloise would also like to receive monthly benefits in the event she is placed in an assisted living facility. What should Sonia tell her?

Ariana is a Vancouver restauranteur who owns a $250,000 universal life (UL) insurance policy with a cash surrender value that has grown considerably over the years. Unfortunately, her restaurant has fallen on hard times and in an effort to turn the business around, she takes out a string of business loans that she personally guaranteed. To protect her life insurance from creditors, she changes the beneficiary designation from her estate, naming her husband as a revocable beneficiary. Despite her efforts, the restaurant’s profits do not improve, and she is forced to close her business and file for bankruptcy. Can her creditors seize her cash surrender value?

Brian is a machinist. For the past seven years, he’s worked for a company that offers a group benefits plan. Under that plan, the premiums for long-term disability coverage are entirely paid by the employees. Last year, an injury forced Brian to stop working for eight months. After a four-month waiting period, during which he collected Employment Insurance (EI) benefits, Brian received long-term disability (LTD) benefits from the group plan’s insurer. Brian is now preparing his income tax return and wonders about the tax implications of the different benefits he received while on disability. What statement accurately describes the tax treatment of Brian’s EI and LTD benefits?

Juniper, 69, suffered a stroke a few weeks ago which left her partially paralyzed and has severely reduced her mobility. Since the stroke, she is unable to leave her home. She benefits from regular visits from nurses, massage therapists, and housekeepers. Juniper wants to claim the services on her long-term care (LTC) insurance policy and would like to know how the claim will be processed and paid.

Which of the following answers is CORRECT?

Becky opened a small bakery five years ago. Although she struggled at first, her business hasbecome increasingly successful. Until recently, she only had two full-time employees, but now she hired two more and relocated the store to a busier street. The rent is higher, and so are the profits. As the bakery expands, however, Becky is becoming increasingly concerned about what would happen to it if she became unable to work—even for just a few months—due to an illness or an injury. Which one of the following options would most suitably protect Becky’s business against such a risk?

Jordan, a group insurance agent, meets with Nancy, a commercial berry grower in Saskatoon, to renew her company's group insurance plan. When the plan was established four years ago, Nancy had 20 employees. She now has over 50 employees, many of whom are unhappy with the plan. Jordan wants to rectify this situation to everyone’s satisfaction but is not sure how to begin.

Which of the following options indicates the first step that Jordan should take?

Ziad, aged 34, was an elementary school teacher for several years. However, staffing cutbacks and his love of food have prompted him to go into business. He just purchased a pizza franchise (taking a $150,000 personal loan to finance the venture) and entered into a five-year lease for his business. Ziad owns a 20-year term life insurance policy with a face amount of $250,000. He is also covered for some benefits under his wife’s group insurance plan, but knows he needs additional coverage. What type of accident and sickness coverage should Ziad purchase first?

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?

Tyler, a group insurance agent, is meeting with Yolanda, the director of his new group insurance client, Compact Funds Inc., to set up the company’s plan. Compact Funds employs over 30 employees, and Tyler recommends that they implement a contributory plan. Yolanda would like to understand what this means. Which of the following statements about contributory plans is CORRECT?

Patricia is a laboratory technician who normally earns $4,000 a month. A few months ago, she injured her leg rollerblading and was unable to work for four months. Since she owns a disability insurance policy with a residual benefit option, she received $2,400 a month from the insurer. Now that she is recovered, her doctor has cleared her to slowly return to work. Since she cannot work her regular full-time hours, her pay has decreased to $3,000 a month.

How much will she receive from her residual benefit when she returns to work?

Nikolai owns a guaranteed renewable individual disability policy that he purchased last year. The policy pays a monthly benefit of $3,000 and includes a 4-month waiting period and a 5-year benefit period. Today, he is diagnosed with prostate cancer and learns he must undergo 6 months of radiation.

When should he contact the insurance company to inform them of his diagnosis?

Kerry is 52 years old and he is purchasing additional coverage on his individual disability income insurance policy using a future purchase option. His income has increased about 35% since he took out the policy four years ago. What is Kerry guaranteed to receive as a result of the rider?

Nathalie worked for 25 years as an administrative assistant at a manufacturing company. When she left the company 10 years ago, she transferred the money that she accumulated from the company’s pension plan into a locked-in retirement account (LIRA). Now she is 60 years of age and would like to withdraw the money from the LIRA.

Under which of the following circumstances would Nathalie be allowed to withdraw her funds?

After completing a thorough needs analysis, Dimitri, an insurance agent with Health Assure, recommends that his client Chandler purchase a deferred annuity contract and contribute monthly to a balanced segregated fund to build up savings that Chandler can use as retirementincome. Dimitri explains to Chandler that the type of annuity contract he is recommending has two distinct phases.

What are those two phases?

Last year, Ezekiel purchased a $100,000 life insurance policy and named his wife Jolene as an irrevocable beneficiary of the policy. Last week, Ezekiel returned home early from a business trip and decided to surprise his wife instead of calling ahead. He arrived at midnight and not wanting to wake her, entered the house from the back door and left the lights off. Not expecting the intruder to be her husband, Jolene stabbed him in the heart with a kitchen knife. She quickly realized her mistake and called 911. Unfortunately, Ezekiel died in the hospital from his wounds. The police deemed Ezekiel's death as accidental, and no charges were filed. Will the insurer pay the death benefit?

Kirill purchases a $250,000 permanent life insurance policy on the life of his grandson, Dmitry. Kirill asks his wife Katya to pay the policy premiums and names his daughter, Natalya, as the subrogated policyholder. He does not name a beneficiary. Subsequently, Kirill dies without a will.

Who will become the new policyholder?

Maryse, an insurance of persons representative, meets with Anita, an actress, to complete a life insurance proposal. Maryse asks her for proof of age and identity. Anita does not like giving out her personal information and asks Maryse if she really needs to ask for these documents. Under what legislation is Maryse able to ask for these documents?

Claudie’s mother has been the policyholder and beneficiary of an insurance policy on the life of Claudie since she was five years of age. Claudie is now the mother of a three-month-old boy. Claudie would like for Marc-André, her de facto spouse, to be the beneficiary of the policy. What steps need to be taken in order for this to happen?

Financial security advisor Juliette meets Pierre during a business meeting. Pierre gives her the name of a prospect, one of his friends. Juliette wants to start by contacting the prospect by email, then plans to follow up with a phone call to set up an appointment. Why should Juliette cease to proceed in this manner with her prospect?

Gino, an insurance of persons representative, is cleaning his office and going through old files. He comes across a file from a former client, Nathan, who owned a 20-year term insurance policy that was cancelled 3 years ago. Nathan now has a different representative and Gino no longer has any contact with him. Gino would like to know if he can destroy Nathan's file.

Which of the following options is CORRECT?

Benjamin is a financial security advisor working for the Larson Group. He is following a mandatory compliance training session given by Andrew, the compliance manager. Andrew explains the importance of following the Chambre de la sécurité financière code of ethics, and Benjamin would like to know to whom the code of ethics applies.

What is Andrew's CORRECT response?

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?

Danny purchases a $1,000,000 whole life insurance policy. He names his three daughters, Donna-Joe, Stephanie, and Michelle, as revocable beneficiaries with each receiving one-third of the death benefit.

If Michelle predeceases Danny, and Danny did not have a chance to modify his beneficiary designation, how will Danny’s death benefit be paid out?

President and sole shareholder of the Velos Tourisque company, Paul employs 50 people. Maryse, his financial security advisor, advises him to have his company take out life insurance on him. Who will be the parties to the contract?

A few months ago, Urmish filed a complaint to the Autorité des marchés financiers (AMF) about the services he received from his insurance agent, Jaba. The complaint was heard by the discipline committee, and Jaba was found guilty and ordered to pay a $10,000 fine. Jaba is upset and does not agree with the verdict. She would like to appeal the verdict.

Which of the following statements is CORRECT?

Insurance of persons representative Véronique is meeting clients referred by an acquaintance for the first time. Observing some suspicious behaviours on their part, Véronique is thinking about reporting the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Which behaviours are signs of suspicious transactions?

Marietta receives a summons from the syndic of the CSF regarding an investigation into her associate. The summons was delivered to her office on May 2 and she took notice of it on May 4. The summons requires her to receive the syndic representative at her office on May 19 at 8:30 a.m. Marietta has already planned for and reserved a week off for a vacation abroad from May 15 to 22. She immediately emails the syndic representative to inform him that she will be out of the country and cannot be present on the 19th. She proposes meeting on the 14th or the 23rd ofthe same month. Pursuant to the Code of Ethics of the Chambre de la sécurité financière, which duties or obligations has Marietta breached?

Constantin is a 47-year-old marketing manager earning an annual salary of $175,000, who, together with his husband, recently purchased a house. A few years ago, Constantin was terminated from his previous position, and it took him two years to find similar employment in his field. The prolonged lack of income caused him to accumulate substantial debt. Today, after several years of sensible budgeting, the only debt remaining is his mortgage. He purchased disability and life insurance on the mortgage at the bank.

Given this information, what is Constantin's greatest financial risk?

Julie and Jim have been married for 16 years and decide to divorce. They draw up a list of property that will be partitioned based on the provisions of family patrimony: the family home, the cars, the RRSPs, and the benefits accrued with the RRQ during the marriage. What other items should be added to Julie and Jim's list?

Surjit and Rajbir got married in 2010, and Surjit named Rajbir as the irrevocable beneficiary of his life insurance contract. In 2017, the couple divorced amicably, and Surjit met with his insurance representative, Ivan, to review his plans. Surjit tells Ivan that he would like to keep Rajbir as his beneficiary.

What should Ivan counsel his client to do?

Isaac and Natasha, Quebec residents, were married 18 years ago. At the time, they visited a notary to get married under the "separation as to property" matrimonial regime and had indicated their wish to waive the application of the division of the patrimony by agreement. After experiencing a series of personal crises, the couple is now divorcing.

Which of the following assets, if any, will they have to separate when they divorce?

The company Xtra is growing. Mr. Trenet, chair of the executive committee, invites his financial security advisor, Noah, to meet with them to underwrite an annuity contract. The treasurer of Xtra offers to invest $2,500,000 of the company’s retained earnings. Before voting on a resolution to designate a policyholder, the treasurer asks Noah if Xtra can be designated as the policyholder instead of Mr. Trenet. What answer should Noah give?

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?

When Tim and Patricia were common-law spouses, they met with an insurance agent, Aelia, to purchase life insurance policies of $100,000 each, naming each other as beneficiaries of their policies. Five years later, Patricia leaves Tim to be with her personal trainer, Thomas. A year later, Patricia and Thomas marry, and Patricia gives birth to their baby, Cedrick. Tragically, just before Cedrick's 12th birthday, Patricia dies in a fiery car crash. She never modified her beneficiary designation.

Shortly after the crash, Thomas calls Aelia to inform her that Patricia has died and that he wants to claim the death benefit on her life insurance policy.

Who will receive the $100,000 death benefit?

Following the death of her sister Sarah last year, Yesha, the liquidator of Sarah's estate, had been in contact with Sarah’s insurance agent Monique on several occasions to claim the death benefit on Sarah’s life insurance policy.

Yesterday, Yesha noticed that Sarah also had a disability insurance policy with a return of premium option which stated that a portion of the premiums can be reimbursed upon her death. Yesha contacted Monique again and asked her for more details about the disability policy and return of premium option but Monique replied that she could not help her as her firm had destroyed Sarah's files shortly after paying out the death benefit.

Did Sarah’s firm act appropriately?

Paola, an employee at Horizon Pharmaceuticals, was recently diagnosed with depression. She is unable to work and is receiving tax-free disability insurance benefits due to her condition. Paola is deeply indebted, and her creditors have been garnishing a portion of her pay for the last year. She is worried about her creditors also garnishing her disability benefit.

Can her disability benefits be seized by her creditors?

Elizabeth is a seasoned insurance agent. She meets with Harold, a new agent, to help him better understand the industry and the processes that they must follow. Elizabeth tells Harold about a body that administers the regulatory system applicable to insurance intermediaries. Which of the following is Elizabeth referring to?

Elizabeth has a universal life policy and has been diligent in funding it over the last several years. As a part of this, the investment account within the policy has done quite well. Elizabeth met with her financial advisor as she would like a refresher on the benefits of the accumulating fund, as it has been a while since they last discussed this; flexibility with and access to cash flow are important to her as she would like to use this as part of her retirement planning in the future.

What benefits of the accumulating account apply to Elizabeth's situation?

Jenny purchased a whole life insurance policy 10 years ago. She was recently diagnosed with a terminal illness and the doctor told her she got an estimated life span of 12 months. She would like to spend the rest of her time with family doing vacation across the world. She brought Ellen, her daughter and also her beneficiary to the life insurance agent and wants to find out about the claims process.

What does Ellen need to know regarding the claims process in this situation?

Joseph, a retired jeweler, meets with Larry, an insurance agent with Summit Life Co., to review Joseph's life insurance needs. Joseph has made it clear in his will that upon his death, his son will inherit his collection of diamond necklaces, valued at $1.8 million.

What type of asset is Joseph's diamond necklace collection considered to be?

Svetlana is a 45-year-old single mother with two children: Georgi 17; and Ingrid 13. The children's father, Vladimir, has a serious gambling problem and only visits them sporadically. Vladimir's younger brother Sergei, on the other hand, is a dependable and helpful uncle who helps Svetlana regularly with the children. Svetlana meets with Robert, an insurance agent to review her life insurance needs because she wants to make sure that her children are taken care of if she were to die prematurely. Robert suggests that she purchase a $200,000 policy. Who should she name as a beneficiary?

Donald finds out from his doctor that he only has about 10 months to live. He owns a $100,000 life insurance policy with a terminal illness benefit of $50,000. Donald has named Yvana as the policy's irrevocable beneficiary.

Donald wants to know whether he has to obtain Yvana's consent concerning the amount he will be paid as the terminal illness benefit. He would also like to know how much Yvana will receive after his death.

What should his insurance agent tell him?

Harold is a 66-year-old retired school bus mechanic. He receives $900 a month from his defined benefit pension plan (DBPP). His husband Karl is also retired and receives his own pension benefit. Harold would like to know the minimum monthly pension benefit from his DBPP that Karl will receive upon Harold's death.

Antonin and Magali are common-law partners in their thirties. They have two children together: a five-year-old daughter and a two-year-old son. Divorced from ex-wife Vanina, Antonin must pay her $1,500 a month in child support until their 10-year-old son reaches 25 years of age. Antonin is covered under a group life insurance policy equal to one year of his $75,000 annual salary. Magali does not currently earn any income, as she takes care of their two children full-time. Antonin is the sole owner of their residence, which will be fully paid off in 25 years.

What life insurance coverage do Antonin and Magali need in their situation?

Georges is a widower and sole shareholder of the firm Distribution Beluga. Upon his death, he will bequeath the firm to his son, Kevin. During a recent discussion with his accountant, the accountant told Georges that when he dies, Kevin will face a significant tax burden because the fair market value of the firm (a Canadian-controlled private corporation), once the ACB is deducted, is $4,600,000. Furthermore, Georges has never taken advantage of the lifetime capital gains exemption, which will be estimated to be $1,250,000. George's tax rate is 48%.

What will Kevin's tax debt be upon George's death?

Manitoba resident Patrice works for ABC Inc. where he is covered by group life insurance. He consults Louise, his insurance agent, because he wants to maintain some life insurance coverage when he retires at age 65.

How much of Patrice’s group life insurance can he convert to individual life insurance coverage when he retires?

Maxine meets with Toshiko, an insurance agent for United Life, to purchase a $10 million universal life insurance policy. Once United Life reviews Maxine's file, they agree to insure her for $3 million. United Life then contacts Extra Life Company, who agrees to insure Maxine forthe additional $7 million. Toshiko asks his supervisor Bob how the death benefit will be paid to Maxine's beneficiary when she dies.

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?

Donald is married and has two children, ages 3 and 5, one of whom is severely disabled and will never be able to live independently. He is considering buying $500,000 of life insurance to guarantee care for his disabled child for his lifetime. He also wishes to insure his 20-year mortgage of $250,000 to ensure that his family can remain in their home in the event of his death.

What life insurance policy would you recommend to Donald?

Coraline owns a $250,000 whole life insurance policy. She purchased the policy last year and does not have any funds accumulated in her cash surrender value (CSV). On December 30, Coraline assigns the policy to the cancer foundation, and she plans on continuing to pay the $200 monthly premium. Coraline calls her accountant James to ask him how much of her donation she will be able to use to obtain a charitable tax credit this year.

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.

Lacy is reviewing her life insurance policy with Paul, her financial advisor, because she wants to better understand its cash value and to take advantage of tax sheltering. She purchased a $200,000 Universal Life policy 3 years ago and has minimum funded the policy on an annualbasis. Lacy is used to investing and is familiar with the investment world. In addition, her universal life policy has the level protection death benefit, and she has no intention of withdrawing the deposit amount, as she wishes to benefit from the tax exemption. Lacy is prepared to deposit a large lump sum of cash into her policy that she received from an uncle that passed away.

Before completing the deposit, what should Paul inform Lacy about?

Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael what she should do.

Life insurance agent Alexandra completes a life insurance application with her client, Joshua. After three months in underwriting, the application is accepted and the policy is issued on a standard rate. Alexandra goes to deliver the policy. When she gets to Joshua's, he tells her how he just got out of the hospital with a serious blood clot.

What should Alexandra do?

Sidney is a professional hockey player that recently purchased a large house and wants to have life insurance coverage to cover the cost. He meets with his life insurance agent, Dave, to determine his need and complete an application. After completing a needs analysis, it is determined he should have $25,000,000 worth of life insurance. Dave makes an application to A-Z Life Insurance Co. for $25,000,000 of permanent life insurance. The insurance company tells Dave that they have a maximum retention amount of $20,000,000 per policy.

What will happen in Sidney's case?

(Nancy has invested $100,000 in mining company stocks in her local area.

To which of the following risks is Nancy most exposed?)

(Anthony, 26, wants to invest $500 but be able to cash it in anytime without fees and wants capital protection.

What investment should the insurance agent recommend?)

Genevieve and Martin, a couple in their 40s, meet with Melissa, their insurance agent, to help them plan for their retirement. Melissa tells them that they would benefit from opening a spousal registered retirement savings plan (RRSP) given their financial situation and discrepancy in their incomes. The couple would like to know the benefits of opening a spousal RRSP.

(Priscilla is worried about losing her job in six months. She invests $1,000 per month in segregated equity funds but has limited cash savings.

What should her insurance agent, Arthur, advise?)

Sebastian is a 44-year-old sales representative employed at Premier Aqua. He wants to take a year off to travel and relax. He has worked for the company for 25 years and accumulated $230,000 in adeferred profit sharing plan (DPSP). He would like to know if he can use some of the funds in his DPSP to fund his sabbatical.

(At 60 years of age, Pierre recently retired for health reasons: he suffers from leukemia and is only expected to live three or four more years, according to his oncologist. A friend advised Pierre to purchase an annuity with his RRSP, as he has no immediate family to leave money to and wants a guaranteed monthly payout.

What type of annuity would be best suited for Pierre?)

(Philippe, age 50, has been a widower for six months. He inherited the money in his wife's pension fund, which he transferred to a LIRA. He also received a $150,000 life insurance benefit. Philippe works for a private firm as an IT analyst and earns $80,000 a year. He would like to retire at age 60.

What income sources will be available to Philippe if he retires at age 60?)

Hana, a 25-year-old personal assistant, recently got a job where the employer offers all employees access to a defined contribution pension plan (DCPP). Hana meets with the groupinsurance agent, Tom, because she must choose her investments and she doesn't know what she should choose. She is not very knowledgeable about investments, but since the money will only be used at retirement, she wants to invest in a fund that combines stocks and bonds and that is easy to understand.

Which fund should Tom suggest?

(Joe and Joy, both aged 65, have $280,000 in savings and a $200,000 joint first-to-die life insurance policy. They want to buy an annuity to provide steady income in retirement.

What type of annuity would best suit their needs?)

Joel and Gina, a 65-year-old couple, have just retired and are meeting with their advisor, Mark, to do some tax planning. Joel's annual income is $75,000, and Gina's is $35,000. His marginal tax rate (MTR) is 40% and hers is 26%. Mark discusses the advantages of income splitting with them. After their income split, their respective MTRs are 32% for Joel and 30% for Gina. How much income tax will Joel and Gina save if $15,000 of Joel's income is transferred to Gina?

Over the years, Agnes, a disciplined investor with a modest income, was able to save over $140,000 in an accumulation annuity. She plans on using the funds in a few years to travel the world and enjoy life while she is still healthy.

Which of the following statements about her annuity is TRUE?

(Harry, aged 60, recently sold his business and plans to invest $100,000 in segregated equity fund contracts. He wants to minimize costs but has a family history of early death.

What maturity and death benefit guarantees would be most appropriate?)

(Matthew, 40 years old, is leaving his employer (XYZ Corp) and has $100,000 in a group RRSP.

What should Shawn, the advisor, do?)

Seven years ago, Amber invested $150,000 in a non-registered equity segregated fund. Her investment grew, and today, the market value of her fund is $165,000. She places an order to redeem her fund and she wants to know how her investment will be taxed.

(Eric, aged 28, currently works for an accounting firm. He still lives with his parents but is saving to buy a place of his own. Seven years ago, his grandparents gave him a significant cash gift following his college graduation. He deposited it into a segregated fund that invests in the natural resources sector. However, real estate prices are rapidly increasing. Eric is concerned that if he does not buy a place in the next three to five years, it might become altogether unaffordable. In addition, the shares of the segregated fund he holds have seen a sharp drop in market value two years ago and they have not recovered yet.Eric questions his current choice of investment and asks his life insurance agent if he should switch to a different type of segregated fund.

What should the agent recommend?)

(Ulysses, aged 35, is a risk taker who likes to concentrate investments in specific industries expecting higher returns long term.

Which feature of segregated funds will be most appealing to Ulysses?)

Enzo meets with his insurance agent Theo to discuss his investment needs. When Theo asks Enzo about his liabilities, Enzo tells him that he purchased a house for $750,000 four years ago and his current mortgage balance is $600,000. He has a fixed interest rate on the mortgage of 3.5% for 5 years.

Which of the following statements about his mortgage is TRUE?