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1. Naomie meets with her new client, Keisha, to review her investment portfolio. Keisha is a 43-year-old sales representative who has been with Belmont Inc., a large pharmaceutical company, for 15 years. She earns a generous salary, plus bonuses. She also has a group tax-free savings account (TFSA) and a defined contribution pension plan (DCPP), all of which are invested in Belmont common shares.

What main need does Naomie have to address regarding Keisha’s investments?

2. 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?

3. Sasha is an employee at PranaTech. The company offers all employees a pension plan. PranaTech must contribute into the plan, but employee contributions are not mandatory. Sasha chooses where his funds will be invested.

4. Bethenny meets with Harrison, an insurance agent, to review her life insurance needs. Bethenny is a single mother of a 3-year-old daughter named Emma. Bethenny's main concern is that Emma is taken care of financially if Bethenny were to die prematurely. Emma’s father Steve suffers from chronic alcoholism and is homeless. He has not been present in Emma's day-to-day life. After careful analysis, Harrison suggests that Bethenny purchase a $250,000 20-year term insurance policy.

Given Bethenny's situation, who should she name as a beneficiary on her policy?

5. Li Jun, 50, applies for a $250,000 critical illness (CI) insurance policy with his insurance agent Ming. On the application, Li Jun states that he must take pills daily to manage his hypertension. Aside from this, his health is good. Given his age and hypertension issue, he is worried that the insurer may refuse his application.

What does Ming CORRECTLY advise him?

6. 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?

7. Lily works for Cloud 9 Inc. She earned $120,000 in Year 1 and $125,000 in Year 2. Lily contributes 5% of her income into a defined contribution pension plan (DCPP), and this contribution is matched by the employer. Lily has unused contribution room of $15,000 and wants to know how much she can contribute to her registered retirement savings plan (RRSP) in Year 2.

8. Which organization provides protection for holders of segregated fund contracts in Canada if the insurer becomes insolvent?

9. 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.

10. 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?

11. Larson, an insurance agent, meets with Julia, a real estate agent, to review her insurance needs. Julia has $500 in her savings account and does not own a tax-free savings account (TFSA) or registered retirement savings plan (RRSP). She earns an average of $150,000 a year in sales commissions and rental income from two condo units she owns. The combined value of her income properties is $1,000,000, and the mortgage is $200,000.

Larson recommends that Julia open a TFSA and use it to invest $400 a month in a money market fund.

Which of the following personal risks is Larson trying to mitigate with this advice?

12. 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?

13. 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 the side 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?

14. 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?

15. On February 5, Ayla started working at Larson Group Inc. as an administrative assistant. Larson Group offers all employees a group health, dental and life insurance plan that commences after a 3-month waiting period. On April 7, Ayla felt ill and drove herself to the hospital. The doctor diagnosed two clogged arteries and performed an emergency surgery. Ayla was unable to work for 2 months, then died of complications on June 9. Will the group insurance plan pay the death benefit?

16. Kyra is the owner and president of Borealis Fit, a martial arts studio with 15 employees. The centre opened five years ago and has done well. Kyra was never able to offer her employees any benefits until now. Kyra meets with Monica, an insurance agent, to implement a group insurance plan for the employees.

Which method of calculating rates will the insurer use to quote the group premiums?

17. Laekyn purchased an individual disability insurance policy 3 years ago from Awah, her insurance agent. Today, Awah receives a call from Laekyn, who says she is hospitalized following a suicide attempt. Laekyn says her doctor diagnosed her with bipolar disorder and expects she will be able to return to work in 3 months.

Will Awah be able to help Laekyn receive disability benefits?

18. Jasper owns TeleVida, a successful production company with over 50 employees. He wants to expand the company by opening an office in another province. Jasper needs to take out a $500,000 20-year loan to make this expansion happen.

However, he wants to make sure that if he dies while there’s an outstanding balance on the loan, the balance will be paid in full by the insurance company.

19. 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?

20. Zaid married Baheya five years ago in Montreal. A year later, Zaid purchased two individual term-life insurance policies, one on his life and the second on Baheya’s life, each with a death benefit of $250,000. The marriage didn't last long and the couple divorced shortly thereafter. Baheya went on to marry Omar, and the new couple had a baby together, named Darwish.

Last week, Baheya died in a car accident. While settling her estate, Omar discovered that no beneficiary was designated on Baheya’s life insurance policy.

To whom will Baheya’s death benefit be paid?

21. Remi owns a registered annuity contract that pays him a $2,500 monthly benefit. He purchased the contract five years ago from money he accumulated in his registered pension plan. At the time, he named his wife Annette as the revocable beneficiary of the contract. Today, he calls Louisa, his insurance agent, to designate his sister as beneficiary of the contract instead. Louisa tells him that there are restrictions on the contract and that he cannot change the beneficiary designation.

Why is Remi unable to make the change?

22. Arthur is a 79-year-old long-term care (LTC) policyholder whose daughter, Sheila, visits daily to help him get dressed and prepare meals. Sheila wants him to enter a nursing home because he is unable to dress himself. Though he cannot prepare his own meals, he can still feed himself, and once undressed, he can wash himself, seated in the bathtub.

Is Arthur eligible to receive LTC benefits?

23. 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?

24. 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 retirement income. Dimitri explains to Chandler that the type of annuity contract he is recommending has two distinct phases.

What are those two phases?

25. 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?

26. 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.

27. 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?

28. Emery is a healthy wife and mother of two who spends her days caring for her children and volunteering at the local food bank. Emery would like to purchase disability insurance coverage because she is worried about how she would be able to take care of her family if she becomes disabled.

What type of disability policy, if any, is likely to be issued to her?

29. 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.

30. Arianna, a healthy 61-year-old university professor, is retiring this year and wants to transfer the funds she accumulated in her registered retirement savings plan (RRSP) into an annuity. She is looking at different options and would like to know which of the following annuities will pay the highest monthly benefit.

31. Aaliyah is a 37-year-old account manager at a large pharmaceutical company. She earns $300,000 a year plus bonuses. She meets with Theo, an insurance agent, to review her life insurance needs. Theo deduces that Aaliyah needs a $250,000 universal life (UL) insurance policy. Aaliyah agrees but states that she wants to keep her premiums low.

Which of the following UL death benefit options would BEST suit her needs?

32. Jessica is 61 years old and has $460,000 invested in a registered retirement savings plan (RRSP). She is retiring due to health issues that are expected to reduce her life expectancy and will prevent her from working until she is 65. She would like to transfer her RRSP funds into an annuity that will pay her monthly benefits for the rest of her life.

Which of the following annuities is the BEST option for her to purchase?

33. 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?

34. Jonas recently graduated with his engineering degree and is joining the Alberta Engineering Association. He is informed that the association offers a group plan to all members. Jonas wants to join the plan but wishes to know who will pay the premiums for the coverage.

Which of the following answers is CORRECT?

35. Paulette earns a modest income working as a delivery driver for FastFlowers Inc. in Quebec. The florist company has over 80 employees, 20 of whom are delivery drivers. The employees benefit from a group short- and long-term disability plan. One morning, while delivering flowers, Paulette's truck is struck by a bus. Paulette is taken to the hospital where a doctor deems that she will be unable to work for at least 4 months. Paulette contacts Jade, the human resources manager, to ask her who will pay her disability benefits.

Which of the following answers is CORRECT?

36. 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.

37. 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?

38. Johann owns a $250,000 whole life insurance policy. The policy has a cash surrender value (CSV) of $55,000 and an adjusted cost basis (ACB) of $30,000. Johann would like to cancel his policy and use the cash surrender value to fund a new business.

If his marginal tax rate is 40%, how much will he have left after cancelling his policy?

39. Samir applied for a life insurance policy 18 months ago. At the time of the application, he was employed as an accountant. Samir quit his accounting job 6 months ago to become a professional scuba diver.

Which of the following statements about Samir’s life insurance policy is CORRECT?

40. Owen meets with his insurance agent, Rachel, to review his investments. Owen is interested in segregated funds. In particular, he wants to know more about the reset feature.

What should Rachel tell Owen about resetting his funds?

41. Diane is an insurance agent working for Gamma Insurance Inc. who is responsible for coaching a newly licensed agent, Wick. Wick has questions about his role, and he would like to know how he should service his clients.

What should Diane tell Wick about what is expected of him?

42. Vintage Style Inc. is a clothing company with 20 employees participating in its group retirement and group insurance plan. Premiums for the group insurance plan are calculated on previous claims. If the benefits paid are lower than anticipated, the premiums may decrease at renewal. However, if the benefits paid are higher than anticipated, the premiums payable may be subject to an increase.

Which of the following funding formulas does Vintage use in its group insurance plan?

43. Kimeni meets with Orion, an insurance agent, to purchase segregated funds. After assessing Kimeni's needs, Orion suggests an index segregated fund. Kimeni agrees to invest $5,000 in the fund now and $200 every month.

With relation to this transaction, which of the following options is CORRECT about the Fund Facts document?

44. Kaamil meets with Omar, his insurance agent, to purchase a whole life insurance policy. Kaamil wants to name his wife Ofra as the irrevocable beneficiary of the policy.

Before proceeding, which of the following considerations should Omar CORRECTLY ask his client to reflect on?

45. Dr. Kumar owns a 10-year term life insurance policy with a level death benefit of $500,000 issued by Expert Health & Life Inc. The policy is renewable, convertible to age 70, and contains no additional riders. Dr. Kumar is the life insured. She is single, has no dependents, and her estate is named as the policy’s beneficiary. The current premiums are $365 per year, based on standard health, non-smoker rates. As the policy is due to renew in a few months, Dr. Kumar meets with Kavya, an insurance agent referred to her by a mutual friend. Kavya reviews all of the information presented above, but notices a missing detail.

What additional information about Dr. Kumar's policy does Kavya need to complete her review?