LLQP Life Insurance Product Types 2

Question 1

What is the key feature that distinguishes universal life insurance from traditional whole life insurance?

Accepted Answer

Universal life offers flexible premiums and an adjustable death benefit

Answer

Universal life has a death benefit while whole life does not

Answer

Whole life is always more expensive than universal life

Answer

Universal life does not accumulate cash value

Question 2

What does the 'convertibility' feature in a term life insurance policy allow?

Accepted Answer

Converting the term policy to a permanent policy without providing medical evidence

Answer

Converting the death benefit into a lump sum payment while alive

Answer

Converting the policy from one insurer to another

Answer

Converting the beneficiary designation from irrevocable to revocable

Question 3

What is a 'participating' whole life insurance policy?

Accepted Answer

A policy that pays dividends to policyholders based on the insurer's financial performance

Answer

A policy where the policyholder participates in choosing investments

Answer

A policy where multiple people share the same coverage

Answer

A policy that requires participation in a wellness program

Question 4

What is 'decreasing term' life insurance and when is it most commonly used?

Accepted Answer

A term policy where the death benefit decreases over the term period, often used for mortgage protection

Answer

A term policy with decreasing premiums over time

Answer

A term policy that decreases in duration each renewal period

Answer

A term policy sold at a discount to groups

Question 5

What is the 'exempt test' under the Income Tax Act as it applies to life insurance policies in Canada?

Accepted Answer

A test to determine if a life insurance policy qualifies for tax-exempt accumulation of investment income

Answer

A test to determine if insurance premiums are tax-deductible

Answer

A test to determine if the policyholder is exempt from medical underwriting

Answer

A test to determine if the death benefit is exempt from estate taxes

Question 6

What is 'term to 100' life insurance and how does it differ from traditional whole life?

Accepted Answer

It provides coverage to age 100 with level premiums but typically has no cash value or dividends

Answer

It is identical to whole life insurance

Answer

It is a term policy that renews every 100 months

Answer

It is a policy that costs $100 per month regardless of coverage amount