LLQP IFSE Institute Life License Qualification Program (LLQP) Free Practice Exam Questions (2025 Updated)

The practice of trafficking in insurance involves selling or assigning a life insurance policy to a third party, often at a discounted rate, which is typically discouraged within the insurance industry due to ethical concerns and potential misuse. The LLQP materials warn against such practices as they can be perceived as exploiting insurance contracts for profit, rather than for their intended purpose of providing financial security​. Therefore, Andre acted inappropriately by suggesting this arrangement without considering the ethical implications.

Dario violated his duties and obligations towards the public by engaging in aggressive and unsolicited solicitation tactics. According to LLQP ethical guidelines, insurance agents must conduct themselves in a manner that upholds the integrity and reputation of the profession. This includes respecting the public’s privacy and avoiding high-pressure sales tactics​.

The behavior described, where Dario persistently contacts Andrew and sends unsolicited gifts, can be seen as harassment, which is inconsistent with the standards expected of insurance representatives when interacting with the public. LLQP guidelines emphasize the importance of professionalism, transparency, and respect towards potential clients​.

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

In insurance terminology, the policyholder (or policy owner) is the person or entity that owns the insurance contract and has the legal rights to make decisions about it, such as changing beneficiaries or cancelling the policy. TheIFSE Ethics and Professional Practice Course (Common Law)clearly distinguishes between the life insured (the person whose life is covered), the beneficiary (who receives the death benefit), and the policy owner. In this case, Edward and Shirley are explicitly designated as the joint owners of the policy, not merely premium payers. Christine, as the insured, has no ownership rights unless specified, and Edward’s status as beneficiary does not confer ownership. Paying premiums does not automatically make someone the policyholder unless they are also the designated owner. Therefore, option D is correct.

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

Disability insurance policies typically include a waiting period (also called an elimination period), which is the time between the onset of disability and when benefits begin. TheIFSE Ethics and Professional Practice Course (Common Law)notes that insurers require the date of disability onset—via an APS—to calculate this period (e.g., 30, 60, or 90 days). This ensures benefits are paid only after the waiting period elapses. A survival period (A) applies to life insurance, not disability. The incontestability period (B) relates to policy validity, not claimtiming. The grace period (C) pertains to premium payments. Knowing when Molly became disabled is critical for the waiting period, making D correct.

The OmbudService for Life and Health Insurance (OLHI) provides a platform for consumers to resolve disputes related to life and health insurance products in Canada. If Abishola is dissatisfied with the responses from her insurance agent and his supervisor, she can escalate her complaint to the OLHI, which offers a neutral and independent review of disputes concerning insurance products like segregated funds​​.

Other organizations mentioned, such as Assuris, focus on protecting policyholders in cases of insurer insolvency, not individual complaints.

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

Under Canadian common law and insurance principles, a minor who has reached the age of 16 can enter into an insurance contract on their own life, provided they have the capacity to understand the contract. Marcel, at 16, is legally able to apply for and own a life insurance policy where he is also the insured. TheIFSE Ethics and Professional Practice Course (Common Law)emphasizes that the policy owner must have an insurable interest in the insured, which Marcel inherently has in himself. There is no requirement for the application to be signed in his province of residence (New Brunswick), nor is there a need for a parent to witness his signature or act as the policy owner, as long as Marcel consents and understands the contract. His father paying the premiums does not affect ownership, as premium payments can be made by a third party without transferring ownership. Option A is correct because Marcel can legally be both the owner and the insured.

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

Under Canadian insurance law, a policy typically takes effect when there is a meeting of the minds (offer and acceptance) and the contract is finalized, often marked by the policyholder’s acceptance of the terms and conditions. TheIFSE Ethics and Professional Practice Course (Common Law)notes that for individual insurance policies, coverage begins when the policy is delivered and accepted by the insured, provided the first premium is paid or arranged. In Miguel’s case, he signed and accepted the policy and amendment at the delivery appointment, and the premium payment was arranged (via void cheque) with a mutually agreed delay of three days. The policy does not take effect at application (A) unless specified, nor at notice of approval (B) alone, nor solely when the premium is drawn (D). Acceptance at signing (C) aligns with contract formation principles, making it the correct answer.

Life insurance policies in Canada generally include a “free look” or “cooling-off” period, typically lasting 10 days from the delivery date, during which the policyholder can cancel the policy for a full refund of any premiums paid​. Since Xander requested the cancellation within this period, he will be entitled to a full refund. This period allows policyholders to review the terms and make a final decision without financial penalty​.

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

TheIFSE Ethics and Professional Practice Course (Common Law)references FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) guidelines, requiring agents to identify third parties when funds come from a joint account not solely owned by the client. Diane’s $120,000 cheque from a joint account with Geoffrey triggers the third-party determination rule, necessitating a third-party form (A). Reporting to FINTRAC (B) applies to cash transactions over $10,000, not cheques here. The Social Insurance card is acceptable ID, so C is incorrect. Doing nothing (D) violates FINTRAC compliance. A is correct.

=

Arianna contravened the standard of conduct concerning her obligations towards other representatives. LLQP guidelines emphasize professional courtesy and fair competition, which means agents should not prevent clients from seeking second opinions or attempting to restrict their ability to consult with other representatives​.

Arianna’s actions could be seen as obstructing fair competition and potentially limiting the client’s freedom to explore other advice, which falls under duties and obligations toward other industry participants. Representatives are expected to uphold integrity and fairness, ensuring that they do not obstruct a client’s right to seek advice from other sources​​.

When a beneficiary is designated as irrevocable, the policyholder cannot make changes to the beneficiary designation or make other policy modifications that impact the irrevocable beneficiary’s rights without their consent. According to LLQP standards, an irrevocable beneficiary has a vested interest in the policy, and any alterations require their permission​​.

In this case, Surjit would need Rajbir’s consent to change or remove her as the beneficiary, regardless of their divorce. This stipulation upholds the binding nature of an irrevocable designation, ensuring that changes can only be made with the beneficiary’s agreement to protect their rights in the policy​​.

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: Canada’s Anti-Spam Legislation (CASL) governs unsolicited electronic communications, including emails for commercial purposes (Sections 6–8). Contrary to option A, CASL does not prohibit all email solicitation; it allows it withprior consent (express or implied) or under specific exemptions (e.g., existing business relationships). Juliette has no prior relationship with the prospect, and Pierre’s referral does not constitute implied consent under CASL, as consent must come from the recipient (Section 10). Option B is correct because Juliette must obtain the prospect’s consent before sending an unsolicited email, aligning with CASL’s opt-in requirement. Option C is incorrect, as Pierre has no legal obligation to facilitate the contact, though it might be courteous. Option D is impractical and not required by law. The Ethics and Professional Practice manual reinforces that advisors must respect privacy laws and obtain consent before initiating contact, making Juliette’s proposed action non-compliant without prior approval.

In the absence of a designated beneficiary, the proceeds of a life insurance policy are generally paid to the estate (succession) of the deceased, in this case, Baheya. Quebec law stipulates that without a specific beneficiary, the policy death benefit becomes part of the deceased’s estate andis distributed according to her will or intestate succession laws. Since Baheya did not name a beneficiary, the death benefit will be managed within her estate rather than automatically passing to Zaid, Omar, or their child​​.

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

Comprehensive and Detailed In-Depth Explanation: Monique seeks non-legal recourse after her disability claim denial. The OmbudService for Life & Health Insurance (OLHI) is a free, independent service resolving disputes between policyholders and insurers across Canada, including Quebec. The Autorité des marchés financiers (AMF) oversees Quebec’s insurance industry and handles consumer complaints (Distribution Act, Section 103). Option C combines these accessible options, ideal before legal action. Option A (Chambre de la sécurité financière and syndic) targets advisor misconduct, not insurer decisions. Option B (OSFI) regulates insurer solvency federally, not individual claims. Option D (CLHIA) is an industry association without complaint authority. The Ethics manual encourages advisors to inform clients of dispute resolution options like OLHI and AMF.

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: This scenario involves a barter arrangement where Justin leases Simon’s vehicle in exchange for renovations, requiring classification under Quebec’s Civil Code contract principles (Articles 1378–1424). A “contract by mutual agreement” (or consensual contract) is formed through the mutual consent of both parties, as Justin and Simon negotiate terms directly (Article 1385). It is “synallagmatic” because both parties have reciprocal obligations—Justin provides renovations, and Simon provides the vehicle (Article 1381). It is“onerous” since each party incurs a cost and receives a benefit, distinguishing it from a gratuitous contract (Article 1380). Finally, it is “commutative” because the value of the renovations and vehicle use is presumed equivalent at the outset, with no uncertainty as in aleatory contracts (Article 1382). Option A is incorrect because a “contract of adhesion” involves pre-set terms with no negotiation, and this is not gratuitous. Option C fails as it is not unilateral (only one party obligated) or a consumer contract (a commercial or standard-form transaction). Option D’s “instantaneous performance” is incorrect, as the lease and renovations suggest ongoing obligations. The Ethics and Professional Practice manual underscores advisors’ duty to accurately interpret contract types for clients.

Comprehensive and Detailed In-Depth Explanation: Under Quebec’s Civil Code, specifically within the framework of family patrimony (Articles 414–426), the partition of property upon divorce includes assets acquired during the marriage that are designated as part of the family patrimony. The family home, cars, RRSPs (Registered Retirement Savings Plans), and benefits accrued under the RRQ (Régie des rentes du Québec, or Quebec Pension Plan) are already listed, as they are explicitly included under Article 415. However, family patrimony also encompasses other property used for the family’s benefit, such as bank accounts that hold funds accumulated during the marriage for family use. TFSAs (Tax-Free Savings Accounts) are individual savings accounts, but if they were used for family purposes or funded with marital income, they could also be considered. The Ethics and Professional Practice (Civil Law) manual emphasizes thatadvisors must ensure clients fully understand the scope of divisible assets under family patrimony rules to avoid omissions. Life insurance cash surrender values (option C) are not automatically included in family patrimony unless designated for family use, and “nothing else” (option D) overlooks additional divisible assets like bank accounts. Option B, “Bank accounts and TFSAs,” correctly expands the list to include other relevant marital property, aligning with the Civil Code’s broad interpretation of family patrimony.