Q1. Sandra has partially assigned her UL policy to the bank as security for a personal loan. The policy has a guaranteed insurability benefit rider. The bank accepted the policy as collateral for the loan, not just for the death benefit, including the $75,000 cash value invested in guaranteed interest accounts. This type of investments is considered safe, meaning it will not drop in value at any point.

What will the bank permit Sandra to do with her policy?

a) Withdraw money from the investment fund

b) Stop paying the premiums

c) Transfer the money of the investment fund from the guaranteed account to equity index funds

d) Increase the investment fund value by Increasing her premiums

Correct ANS:

Reason:

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Q2: Jack has assigned his $400,000 whole life insurance policy with a cash surrender value (CSV) of $100,000 to his favourite registered charitable organization. Jack's taxable income is $80,000. Under the Income tax Act. the federal government provided a tax credit of 15% on the first $200 of donations and 29% on amounts over $200. If Jack lives in a provide that offers a charitable donation tax credit of 10% on the first $200 of donations and 21% for donations over $200, what will be the total amount of the charitable donations tax credit that Jack will be able to claim for that tax year?

a) $9,950 b) $29,950 c) $39,950 d) $49,950

Correct answer:

Reason: