Life Insurance Questions:

1. Farley has determined that he needs life insurance coverage of $500,000 and he reviews several a insurance policies offered by different insurers with his insurance agent, Jillian, in addition, given his family's history of Parkinson's he is also considering a critical illness (CI) insurance policy. Two of the policies Farley reviews include a dread disease (DD) benefit rider. When Farley asks about DD benefit riders, which of the following statements is CORRECT response that Jillian should provide him?

A. If Farley was diagnosed with Parkinson's, the policy would automatically pay a lump sum equal to the death benefit of $500,000 under the dread disease (DD) benefit rider.

B. The benefit bundling the critical illness coverage through a DD rider with the life insurance policy involves less stringent underwriting standards that an individual CI policy.

C. The cost for a DD rider is often more costly than if purchasing a CI policy independently due to the duplicated cost of underwriting costs of underwriting both policies.

D. Each policy may not have the same list of covered conditions and Farley should ensure the policy he is considering covers Parkinson's.

2. Konrad, age 66, and his wife Augustina, age 65, have 2 children, Jedrik and Basha, age 30 and 32 respectively. Konrad and Augustina are both retired and both receive Canada Pension Plan (CPP) retirement benefits and Old Age Security (OAS) pension. In the event of death, which of the following statements concerning OAS and CPP is CORRECT?

i) If Konrad dies, Augustina can receive a CPP survivor's pension.

ii) If Augustina dies, Jedrik and Basha can receive CPP children's benefits.

iii) If Augustina dies, Konrad can receive a CPP survivor's pension

iv) If Konrad dies, Jedrik and Basha can receive OAS children's benefits

A. i and iii

B. i and iv

C. ii and iii

D. ii and iv

3. Matt and Crystal are married with a young family of 4 school-age children. Matt is a cargo truck driver for an airline and he has a group benefits plan which offers dental and extended health care coverage for his family. Matts dental plan has a $100 individual deductible and a $300 family deductible. In January, Matt had a dental visit which cost $120. In February, Crystal had a dental visit which cost $150. In March, all 4 of the children went of their annual check-up which cost $400. How much of the total amount from all dental visits was refunded?

1. 270
2. 300
3. 370
4. 440

4. Sorely is an insurance agent and he meet with his client. Latoya, for an annual review. Latoya owns a whole life insurance policy with a face value of $250,000, an adjusted cost basis (ACB) of $44,000, and a cash surrender value (CSV) of $68,000. The annual premium on her policy is $8,000. Latoya tells Sorely that she would like to make a charitable donation to her favourite charity. Which of the following statement about charitable donations is CORRECT?

A) If Latoya assigns the policy to a charity, she will receive a tax credit based on a $44,000 charitable donation in the current year.

B) If Latoya assigns the policy to a charity, she will receive a tax credit based on a $68,000 charitable donation in the current year.

C) If Latoya names a charity as beneficiary, she will receive a tax credit based on a $250,000 charitable donation in the current year

D) If Latoya names a charity as beneficiary, she will receive a tax credit based on a $318,000 charitable donation in the current year.