Pass the IFSE Institute Life License Qualification Program LLQP Questions and answers with CertsForce

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.

Comprehensive and Detailed In-Depth Explanation: In a corporate-owned life insurance policy, the roles of policyholder, insured, and beneficiary must align with legal and insurable interest principles under the Civil Code of Quebec (Articles 2415–2419). The policyholder is the entity that owns and pays for the policy, the insured is the person whose life is covered, and the beneficiary receives the death benefit. Here, Velos Tourisque, the company, is taking out the policy on Paul, its key person, suggesting it will own the policy (policyholder) and benefit from the proceeds (beneficiary) to protect its financial interests—common in key person insurance. Paul, as the individual whose life is insured, is the insured. Option D correctly identifies Velos Tourisque as policyholder and beneficiary, with Paul as the insured. Option A misassigns Velos Tourisque as the insured (a company cannot be insured, only a person can). Option B incorrectlylists Velos Tourisque as the insured. Option C reverses the roles, making Paul the policyholder, which contradicts the company owning the policy. The Ethics and Professional Practice manual highlights advisors’ duty to clarify these roles for clients.

Comprehensive and Detailed In-Depth Explanation: Reinstatement of a lapsed whole life insurance policy is governed by the Civil Code of Quebec (Article 2428) and insurer policies outlined in the LLQP. If a policy lapses due to non-payment but has a cash value, it may remain in force temporarily via an automatic premium loan or reduced paid-up option. For reinstatement, the insured typically must provide evidence of insurability and repay overdue premiums, interest, and any cash value used, as Concilius offers. The LLQP specifies that reinstatement, if within the insurer’s allowable period (often 2–5 years), restores the policy to its original terms—same premium and coverage—unless otherwise stipulated. Option B, “with the same initial conditions,” aligns with this standard practice. Option A (new premium based on age) applies to new policies, not reinstatement. Option C (premium increase) or D (reduced amount) might occur if insurability declines, but Concilius meets the conditions, so no adjustment is required. The Ethics manual stresses transparency in explaining reinstatement terms.

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: Maryse’s request for proof of age and identity is tied to legal obligations beyond standard insurance practice. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA, Section 9) mandates financial professionals, including insurance representatives, to verify client identity to prevent money laundering, requiring documents like a birth certificate or driver’s license. The Insurers Act (Section 93) and its Regulation complement this by requiring insurers (and their representatives) to confirm insurability and identity for underwriting accuracy, such as age affecting premiums. Option D correctly identifies these laws. Option A’s Charter (Sections 1–4) protects rights but doesn’t mandate ID collection. Option B’s Distribution Act (Section 16) and APPIPS (Section 10) govern advisor conduct and privacy but don’t specifically require ID for proposals. OptionC’s APPIPS pairing with PCMLTFA is incomplete without insurer-specific rules. The Ethics manual supports compliance with anti-money laundering and insurer requirements.

Comprehensive and Detailed In-Depth Explanation: Under the Distribution Act (Sections 16–18), insurance representatives like Pierre have a duty to act in the client’s best interest by providing clear, accurate information about products, including coverage and exclusions. This aligns with the LLQP’s emphasis on needs-based advising and the Civil Code’s requirement of good faith (Article 1375). Option A correctly outlines Pierre’s responsibility to explain products and exclusions, ensuring Carole makes an informed decision. Option B (handing over brochures without explanation) fails to meet the proactive advisory role mandated by the Ethics and Professional Practice manual, risking misunderstanding. Option C (conference call) is impractical and shifts Pierre’s duty to the insurer. Option D (written questions to the insurer) similarly avoids Pierre’s obligation to directly assist Carole. The manual stresses full disclosure and client education, making A the ethical and legal standard.

When a beneficiary is designated as "revocable" and predeceases the policyholder, their share of the benefit typically reverts to the surviving beneficiaries rather than the deceased beneficiary’s estate. In this case, since Michelle has predeceased Danny, her portion of the benefit is divided equally between Donna-Joe and Stephanie, the remaining beneficiaries. Therefore, each of them would receive 50% of the total death benefit, which is $500,000. If the beneficiaries had been designated as "irrevocable" or if there were specific contingent beneficiaries, different rules might apply​​.

=================

As Paulette is injured during work and is covered by her employer’s group disability plan, her disability benefits would be paid out under this group insurance policy. Group disability insurance provides both short- and long-term coverage, as outlined in her employer’s benefits plan. This plan typically covers income replacement for non-workplace injuries or illnesses. However, since this was an on-the-job accident, it may be covered by the CNESST, but group insurance often still serves as the primary provider in situations where a workplace injury results in short-term disability exceeding standard workplace injury benefits. The SAAQ would only cover injuries directly related to road accidents within its jurisdiction. Employment insurance (EI) provides general income replacement but is secondary to employer-provided group disability benefits​​.

=================

Insurance records must generally be retained for a minimum period to comply with provincialregulatory requirements, which is often five years from the date of termination. This helps ensure compliance with record-keeping mandates and allows for any legal, financial, or administrative review if needed. Gino is obligated to retain Nathan’s file until it has been closed for at least five years, despite the change in representation or policy status​​.

=================

Comprehensive and Detailed In-Depth Explanation: Alec faces a lapsed policy due to communication failures involving his advisor and firm. The Autorité des marchés financiers (AMF) regulates Quebec’s financial advisors and firms under the Distribution Act (Sections 103–115), handling complaints about advisor negligence or firm unresponsiveness. Option C is correct, as the AMF can investigate Olivier’s firm’s failure to update Alec’s address or respond. Option A (CLHIA) is an industry group without regulatory power. Option B (Chambre de la sécurité financière) oversees advisor ethics but focuses on individual conduct, not firm-wide issues or insurer disputes. Option D (Assuris) protects policyholders if an insurer fails, not for lapses due to non-payment. The Ethics manual stresses advisors’ duty to maintain client communication, supporting AMF jurisdiction here.