Free LLQP Life Insurance Practice Questions

Sample Practice Questions

Try these 10 sample questions from the LLQP Life Insurance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A client has remarried but continues to make required support payments to a former spouse. Which information is most relevant when quantifying that continuing dependency?

   1. A.The current spouse's earnings considered alone
   2. B.The support amount and remaining obligationCorrect answer: B
   3. C.An inheritance the former spouse may receive
   4. D.The value of the original property settlement

   Explanation: The source states: "Support obligations to ex-spouse or common-law partner". The stated ongoing support amount and duration measure this dependency. Current-spouse earnings, uncertain inheritances and a past capital settlement do not quantify the remaining payments.

   Reference: CISRO – LLQP Curriculum — Life insurance, 1.1 Personal situation, PDF p25

2. 2Which premium pattern is characteristic of the whole life insurance described by FCAC?

   1. A.Premiums fall automatically as the insured ages
   2. B.Premiums increase every year with attained age
   3. C.Premiums remain unchanged as the insured gets olderCorrect answer: C
   4. D.Premiums equal the annual dividend declared

   Explanation: The source states: "Your premiums won't change as you get older.". Whole life uses the stated stable premium pattern. Increasing yearly mortality rates, declining premiums and dividend-based premiums are different mechanisms.

   Reference: Financial Consumer Agency of Canada – Life insurance — Whole life insurance

3. 3What is the insurer’s underwriting process intended to establish when a client applies for life insurance?

   1. A.Only the identity of the eventual beneficiary
   2. B.Whether to offer coverage and on what termsCorrect answer: B
   3. C.The amount the client must leave to each heir
   4. D.The market return the policy will earn every year

   Explanation: The source states: "They’ll assess your eligibility for coverage before providing you with a policy. This is the underwriting process.". Underwriting assesses eligibility and determines coverage terms and premium. It is not estate allocation or a guarantee of investment returns.

   Reference: Financial Consumer Agency of Canada – Getting an insurance policy — Criteria insurance companies use to issue a policy

4. 4A long-standing client has a new child and takes on a larger mortgage. What is the appropriate coverage-review response?

   1. A.Keep the original recommendation because the policy is already issued
   2. B.Review only the beneficiary’s mailing address
   3. C.Update the needs analysis before recommending any policy changesCorrect answer: C
   4. D.Cancel the existing policy before assessing the new obligations

   Explanation: The source states: "Updated needs analysis". New dependencies and obligations justify updating the analysis. Issuance does not freeze the client's needs, and cancellation before assessment is not supported.

   Reference: CISRO – LLQP Curriculum — Life insurance, 4.1 Review/update process, PDF p34

5. 5Two spouses have similar incomes. One provides continuing financial support for an adult child with a disability. How should the agent account for this in the dependency fact-find?

   1. A.Record support between the spouses but omit support to the adult child
   2. B.Assess dependency solely by comparing the spouses’ earned incomes
   3. C.Treat the child as financially independent because the child is an adult
   4. D.Record the adult child’s continuing financial dependency on the parentCorrect answer: D

   Explanation: The source states: "Family dynamics, particularly on-going dependency relationships - Spouse or common-law partner - Support obligations to ex-spouse or common-law partner (or multiple exspouses) - Minor children - Adult dependents". The adult child’s actual continuing dependency belongs in the fact-find. Spousal-only assessment and comparison of parental wages omit this separate reliance; adulthood alone does not establish financial independence.

   Reference: CISRO – LLQP Curriculum — Life insurance, 1.1 Personal situation, PDF p25

6. 6Which description captures the basic structure of universal life insurance?

   1. A.Permanent life insurance combined with an investment accountCorrect answer: A
   2. B.Temporary insurance that ends when the investment falls
   3. C.A group policy funded only through employer contributions
   4. D.A death benefit paid only from annual policyholder dividends

   Explanation: The source states: "combines life insurance with an investment account.". Universal life combines protection and an investment account. It is not inherently group coverage, dividend-funded protection or a temporary-only contract.

   Reference: Financial Consumer Agency of Canada – Life insurance — Universal life insurance

7. 7A client thinks an old medical investigation is unimportant and wants to leave it off an application that expressly asks about it. What should the agent do?

   1. A.Record only the medical conditions the client considers serious
   2. B.Omit it if the client currently feels well
   3. C.Leave it for the beneficiary to explain after a claim
   4. D.Ensure the question is answered completely and honestlyCorrect answer: D

   Explanation: The source states: "answer all questions on your application completely and honestly.". The requested information must be disclosed accurately. Present well-being or the client's opinion does not justify omitting an expressly requested investigation.

   Reference: Financial Consumer Agency of Canada – Getting an insurance policy — Criteria insurance companies use to issue a policy – Application answers

8. 8A SunUniversalLife Pro owner requests a death-benefit option change that increases the policy’s net amount at risk. What additional requirement does the guide specify?

   1. A.The existing underwriting evidence must be accepted without review
   2. B.Evidence of insurability is required for the increased net amount at riskCorrect answer: B
   3. C.New evidence is required only if the premium-payment frequency changes
   4. D.Only a beneficiary’s consent is needed instead of insurability evidence

   Explanation: The source states: "Evidence of insurability is required if the change increases the policy’s net amount at risk.". The guide expressly requires evidence if the change increases NAAR. Existing evidence is not automatically sufficient, payment frequency is not the stated trigger, and beneficiary consent does not substitute for underwriting the added mortality exposure.

   Reference: Sun Life – SunUniversalLife Pro Advisor Guide — Changing the death benefit option, printed p16

9. 9A parent earns no employment income and provides all daily childcare. How should the agent assess the service-related financial effect of that parent’s death?

   1. A.Estimate the cost of replacing the childcare the parent providesCorrect answer: A
   2. B.Set the childcare replacement need to zero because wages will not be lost
   3. C.Use the working spouse’s gross earnings as the childcare replacement cost
   4. D.Subtract the replacement childcare cost from the survivor’s expense budget

   Explanation: The source states: "You will add in other expenses that may commence or increase because of the death of one of the spouse (such as childcare, the need for a car, etc.).". Death can create new childcare expenses even when no salary is lost. Replacement cost measures this service need. Zero understates it; the other spouse's salary is not the service's cost; new childcare costs increase rather than reduce expenses.

   Reference: Advocis – Practice Development Series, Module 6: Needs Analysis — Providing for family members upon death, Income needs after death, printed p63

10. 10How should an agent describe the investment-related values of a universal life policy?

    1. A.They are guaranteed to rise at the same rate every year
    2. B.They may rise or fall with the selected investments and returnsCorrect answer: B
    3. C.They are determined solely by a guaranteed annual dividend
    4. D.They are unaffected by the performance of the selected investments

    Explanation: The source states: "The death benefit and cash value of your investment account may increase or decrease depending on the: types of investments you choose to hold in your account returns on those investments". Investment choices and returns can change these values. Guaranteed fixed growth, a guaranteed dividend and independence from returns misstate the described investment account.

    Reference: Financial Consumer Agency of Canada – Life insurance — Universal life insurance – Investment results