Harold is a 66-year-old retired school bus mechanic. He receives $900 a month from his defined
benefit pension plan (DBPP). His husband Karl is also retired and receives his own pension benefit.
Harold would like to know the minimum monthly pension benefit from his DBPP that Karl will receive
upon Harold's death.
A
Jasper is the sole breadwinner in his family. His wife Stephanie has chosen to dedicate all of her time
to raising their 3 young children. Luckily, Jasper earns a monthly after-tax income of $25,000 working
as a family doctor in the local clinic. Jasper meets with his insurance agent Odda to purchase a life
insurance policy that will ensure his family will be able to continue toenjoy their current lifestyle in
the event of his death. If his average tax rate is 40% and the investment return is 4%, how much life
insurance should Jasper purchase based on the income replacement approach?
D
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 hedies while there’s an
outstanding balance on the loan, the balance will be paid in full by the insurance company.
A
Alana, Meaghan, and Beatrice are equal shareholders of Advanced Tech Inc. They each own 100
shares of the company. Each share is currently worth $5,000. They recently signed a cross-purchase
buy-sell agreement that is funded by life insurance. What will happen under this agreement if
Alanadies today?
D
Goran and Tanja married two years ago. Last year, they purchased and moved into a three-bedroom
house in the suburbs. The current balance on their mortgage is $655,000. They meet with Ljubomir,
an insurance agent, to purchase a joint term life insurance policy to cover the mortgage. When
Ljubomir asks about their existing coverage, Goran shares that he has none. Tanja explains that she
owns a universal life (UL) policy with a level death benefit of $50,000 and a cash surrender value
(CSV) of $5,000, purchased 6 years ago from another agent. Tanja would like to surrender her UL
policy and use the $5,000 CSV to pay for a trip to Europe. What additional information about Tanja's
UL policy does Ljubomir need to collect?
B
Maxine meets with Toshiko, an insurance agent for United Life, to purchase a $10 million universal
life insurance policy. Once United Life reviews Maxine's file, they agree to insure her for $3 million.
United Life then contacts Extra Life Company, who agrees to insure Maxine forthe additional $7
million. Toshiko asks his supervisor Bob how the death benefit will be paid to Maxine's beneficiary
when she dies.
A
Maverick meets with Alyssa, an insurance agent, to review his life insurance needs. After completing
the needs analysis, Alyssa suggests that Maverick purchase a $100,000 whole life insurance policy
and add a critical illness (CI) benefit rider. Which of the following options is an advantage of adding
the CI coverage as a rider instead of purchasing an individual CI policy?
C
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.
C
Germain is a life insurance agent. This morning, he receives a call from Jason, whose wife, Rosalie
owned a $50,000 life insurance policy that she purchased from Germain seven years ago. Jason
explains that Rosalie had a heart attack and died last week. Germain promises to help as much as he
can.
A
Maeve is an Ontario resident. Fifteen years ago, she purchased a $250,000 whole life insurance
policy and named her husband Guillaume as the primary beneficiary and her 4-year-old son Edwin as
the contingent beneficiary. Last week, Tasha, Maeve's insurance agent called her to ask if she has had
any life changes that would warrant a meeting to review her insurance coverage. Maeve informs her
that over the last year she divorced Guillaume and that she is now living with her new boyfriend
Eduardo. Tasha asks to meet Maeve to review her beneficiary designation. Who will receive Maeve's
death benefit if she dies today?
A
Six years ago, when Kacey was working as an active firefighter, she purchased a $200,000 30-year
term life insurance policy. At the time, the insurance company rated her policy. Recently, she
changed roles and now works for the fire department’s public relations office, answering media calls
and filling out paperwork. She meets with her insurance agent, Bernice, to ask if the insurer would
consider reducing her premiums.
B
Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her
insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael
what she should do.
B
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?
A
Konrad is the owner of CrossBoy, a manufacturing company employing over 50 employees. Konrad
recently took out a $500,000 loan to expand his business. Terrence works as a sales manager and is
responsible for roughly 40% of the company’s revenue. Konrad recognizes the importance of
Terrence's contributions to the success of the company. Therefore, in addition to a sizeable
basesalary, CrossBoy also pays Terrence regular performance-based bonuses. Konrad understands
that if Terrence dies prematurely, CrossBoy would suffer financially. What should he do to protect his
company?
C
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.
D