Advocis / Foran LLQP Suggested Study Schedule WITH KEY TERMS

Transcription

1 Advocis / Foran LLQP Suggested Study Schedule WITH KEY TERMS Advocis LLQP 2012 TFAAC 1

2 Introduction This schedule focuses on the critical learning areas identified by provincial regulators. Depending on other time demands, candidates should consider completing a minimum of one session per week. Candidates who are new to the industry may want to allot eight to ten hours of study to each session. Those with a background in financial services may want to allot three to four hours of study per session. Advocis LLQP 2012 TFAAC 2

3 LLQP Study Aids Advocis recommends the following optional LLQP products to enhance your learning experience. LLQP Practice Exam comprised of 225 multiple-choice questions each with an explanation of the appropriate answer. The focus of this exam is to apply your knowledge and comprehension of the material to a given situation. The questions are designed to simulate the style and difficulty level of the certification exam and the provincial licensing exam. All the important topics in the LLQP syllabus are addressed with practice questions. Cost: $75 For more information on the above item, contact Advocis member services at A four-day intensive classroom seminar, offered through Foran Financial Institute, designed to assist the individual to obtain the necessary knowledge to pass the Provincial LLQP Life Agent's exam. It covers all Advocis/Foran Modules and prepares you to write the Advocis/ Foran LLQP Certification Exam. Students who have purchased the Advocis/ Foran LLQP Study Guide have the option of writing the Advocis/Foran LLQP Certification Exam at the end of Day 4 for seminars in Toronto and Vancouver. For more information on the classroom seminar, contact Foran Financial at or visit the Foran Financial Web site. Advocis LLQP 2012 TFAAC 3

4 Table of Contents Life Insurance Products...7 Study Session Applications of Life Insurance in Estate and Financial Planning... 7 Important Aspects of Term Life Insurance... 7 Key Terms- Study Session Study Hours 3 Life Insurance Products...9 Study Session Important Aspects of Whole and Universal Life Insurance... 9 Key Terms- Study Session Study Hours 6 Life Insurance Products...11 Study Session Provisions in a Life Insurance Contract Key Terms- Study Session Study Hours 5 Accident and Sickness Insurance...13 Study Session Provisions in Disability Insurance Contracts Government Disability Programs Key Terms- Study Session Study Hours 5 Accident and Sickness Insurance...15 Study Session Business Applications for Disability Income Insurance Taxation of Health Insurance Premiums and Benefits Basics of Critical Illness and Long-Term Care Insurance Key Terms- Study Session Study Hours 5 Group Insurance...17 Study Session Important Aspects of Group Life Insurance Key Terms- Study Session Study Hours 4 Group Insurance...20 Study Session Important Aspects of Group Disability Insurance...20 Advocis LLQP 2012 TFAAC 4

5 Basics of Dental Care and Group Accident & Sickness Insurance Key Terms- Study Session Study Hours 5 Underwriting Policy Issue and Claims...23 Study Session Important Responsibilities of the Agent in the Application and Claims Processes Key Terms- Study Session Study Hours 8 Professional Standards Common Law, Contract Law & Life Insurance...26 Study Session Important Aspects of the Agent s Obligations and Duties to the Client and Insurance Company Key Terms- Study Session Study Hours 12 Advocis LLQP 2012 TFAAC 5

6 Investment Products Fundamentals of Insurance Investments...28 Study Session Important Aspects of Insurance Investments and their Provisions Emphasizing the Special Duties for IVICs Important Provisions of Annuities and Related Products Determining the Best Product for the Client Key Terms- Study Session Study Hours 8 Investment Products Fundamentals of Insurance Investments...30 Study Session Industry Guarantees for Consumer Protection...30 Important Aspects of IVICs and the Agent s Duties in Selling Them Important Information on Risk Management, Particularly Investment Risk Key Terms- Study Session Study Hours 8 Retirement...32 Study Session Ways of Assisting the Client in Retirement Planning Retirement Products and their Application Key Terms- Study Session Study Hours 12 Taxation Needs Analysis...34 Study Session What the Agent Needs to Know About Taxation, and When to Engage a Tax Professional Relevant Calculations an Agent Should be Able to Perform Issues Related to Performing a Financial Needs Analysis Key Terms- Study Session Study Hours 16 Advocis LLQP 2012 TFAAC 6

7 Life Insurance Products Study Session 1 Applications of Life Insurance in Estate and Financial Planning Important Aspects of Term Life Insurance To do Module 1: Financial and Insurance Industry Overview Read entire module Complete all end-of-module questions (20) Module 2: Life Insurance Products Read pages 2-1 to 2-32 Complete end-of-module questions 1 to 12 Total reading: 58 pages Learning Objectives Study Guide Reference Select the most appropriate insurance product Basic Life and Health Insurance Products type, given specific circumstances. Explain how term life insurance works. Term Insurance Parties to a Term Insurance Contract Components of a Term Life Insurance Contract Multiple Life and Joint Life Insurance Policies Renewable and Non-renewable Term Plans Convertible Term Plans Attained Age Conversion Original Age Conversion Select the most appropriate term individual life insurance product to meet specific needs. Recommend the most appropriate permanent life insurance products to meet specific needs. Compare the advantages and disadvantages of whole life insurance to term life insurance. When to Recommend Term Insurance Case studies: Norman Yates The Jeffersons Rod Sterling Barbara Hanna Disadvantages and Limitations of Term Insurance Comparing and Contrasting Term Insurance and Permanent Insurance The Differences Between Term and Permanent Insurance Policies Advocis LLQP 2012 TFAAC 7

8 Key Terms - Study Session 1 Authorized stock Baby boom Convertible term insurance Conversion privilege Decreasing term insurance Emergency fund Face amount Fraternal insurance Fraternal Insurance Counselor (FIC) Fraternal society Individual insurance Mortgage insurance Mutual insurance company Non-participating insurance Non-smoker Non-smoker policies Participating shares Personal insurance Policy term Policyholder Policyowner Premium Premium mode Premium notice Re-entry term Renewable term insurance Renewal Smoker Stock insurance company Sum insured Term of policy Term life insurance Term to 100 Advocis LLQP 2012 TFAAC 8

9 Life Insurance Products Study Session 2 Important Aspects of Whole and Universal Life Insurance To do Module 2: Life Insurance Products Read pages 2-33 to 2-57 Complete end-of-module questions 13 to 20 Total reading: 25 pages Learning Objectives Explain the difference between participating whole life and non-participating whole life. Compare the advantages and disadvantages of universal life insurance to other forms of individual life insurance. Explain the difference between yearly renewable term and term to 100 mortality costing in universal life insurance. Explain the difference between guaranteed and adjustable mortality costs in universal life insurance. Explain the impact of investment choices on the viability of universal life insurance. Explain the purpose of term insurance riders to permanent life insurance. Explain the guaranteed insurability benefit, its benefits and appropriate use. Study Guide Reference Non-participating (Non-par) and Participating (Par) Policies Strengths and Weaknesses of Universal Life Guaranteed versus Adjustable Rates for Mortality Deductions Guaranteed versus Adjustable Rates for Mortality Deductions Universal Life Investment Options: Guaranteed versus Variable Policy Benefits and Riders Guaranteed Insurability Advocis LLQP 2012 TFAAC 9

10 Key Terms- Study Session 2 Accidental death benefit (ADB) Accidental means Accrual rules Additional provisions Adjusted cost basis (ACB) Adjustment income Amount at risk Automatic premium loan (APL) Business insurance Buy-sell agreement Cash surrender value (CSV) Contract Contract of life insurance Contributions Death benefit Disposition Dividend Dividend additions Dividend gross-up Dividend options Endow Endowment insurance Exemption test policy Expense loading Extra premium Face amount Front-end load Guaranteed cash surrender value Individual insurance Insurable interest Insured Interest-rate-sensitive policy Ledger cost Level premium plan Life insurance Life insurance company Life insured Loan value Mortality table (and experience) MTAR Net cost Net cost of pure insurance (NCPI) Net income New money policies Non-exempt life insurance policy Optional benefit Optional settlements Ordinary life straight life Paid-up Paid-up additions (PUAs) Participating insurance Partnership insurance Permanent insurance Personal insurance Person insured Policy Policy term Policy dividend Policy fee Policy loan Policyholder Policyowner Policy reserves Population mortality table Preferred beneficiary Preferred risk Premium Premium mode Premium notice Premium offset Premium reduction Premium taxes Quick-pay Rate of mortality Rated policy Reduced paid-up insurance Revocable beneficiary Rider Settlement options Single premium Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Straight life Sum insured Surrender Surrender charge Surrender value Unbundled Universal life insurance policy Variable contract Variable life Whole life insurance Advocis LLQP 2012 TFAAC 10

11 Life Insurance Products Study Session 3 Provisions in a Life Insurance Contract To do Module 2: Life Insurance Products Read pages 2-58 to 2-68 Complete end-of-module questions 21 to 43 Complete 9 Life Insurance Case Studies/Sample Questions listed identified on pages 2-69 Total reading: 11 pages Learning Objectives Explain the impact to the client of these policy provisions: 10-day rescission right Entire contract Suicide and incontestability Grace period Reinstatement Smoking status Misstatement of age or sex Settlement options Material misrepresentation Explain the consequences of an absolute assignment. Given specific circumstances, select the most appropriate individual life insurance products to match a client s situation and needs Study Guide Reference Policy Provisions: for students to understand and be able to apply all of the standard life insurance policy provisions mandated by the Uniform Life Insurance Act Policy Assignments Absolute Assignments The Role of Life Insurance in Financial and Estate Planning Personal Financial Needs Met by Life Insurance Review case study analysis Sunil and Jasmine Advocis LLQP 2012 TFAAC 11

12 Key Terms- Study Session 3 Absolute assignment Accident insurance Accidental death benefit (ADB) Accidental means Additional provisions Adjusted cost basis (ACB) Age admitted Age adjustment Age at issue Age limits Assignee Assignment Assignor Beneficiary Cash surrender value (CSV) Collateral assignment (insurance) Common disaster clause Contingent owner Contract Contract of life insurance Days of grace Death benefit Double indemnity clause Extra premium Face amount Free look Front-end load Grace period Guaranteed cash surrender value Guaranteed insurability benefit (GIB) Individual insurance Insurable interest Insured Irrevocable beneficiary Joint life policy Lapse Lapsed policy Loan value Non-forfeiture options Non-forfeiture values Non-smoker Non-smoker policies Paid-up Parent waiver of premium Policy loan Policyholder Policyowner Preferred beneficiary Preferred risk Replacement Revocable beneficiary Rider Settlement options Special class Suicide clause Surrender Surrender charge Surrender value Advocis LLQP 2012 TFAAC 12

13 Accident and Sickness Insurance Study Session 4 Provisions in Disability Insurance Contracts Government Disability Programs To do Module 3: Accident and Sickness Insurance Read pages 3-1 to 3-22 Complete end-of-module questions 1 to 21 Total reading: 22 pages Learning Objectives Define and explain non-cancellable and guaranteed renewable, guaranteed renewable, and cancelable disability contracts. Describe methods to establish the amount of disability income benefits that will be paid to a disabled person Describe waiver of premium, presumptive disability and supplemental benefits, including partial disability, residual disability, future purchase option, cost-of-living adjustments. Describe the limitations and exclusions that could exist under a disability insurance contract. Compare the federal government sponsored programs to provide short- and long-term disability benefits Study Guide Reference Basic Features of Disability Insurance Policies Guaranteed Renewability Policy Benefits Amount of the Benefit Optional Benefits Ratings And Riders The Terms Under Which a Policy Might Be Issued Extra Premium Exclusion Rider Partial Exclusion Contractual Exceptions Limitations Underwriting Retroactive Underwriting Cancellation Government Disability Programs Advocis LLQP 2012 TFAAC 13

14 Key Terms - Study Session 4 Accident Accidental bodily injury Accidental death and dismemberment benefit Accidental dismemberment Accident and sickness insurance Accidental means Aggregate limit clause Benefit Benefit period Blue Cross Business insurance Business buy-out Buy-sell agreement Commercial policies Contract Declaration Disability Disability (income) insurance Dismemberment clause Elimination period Endorsement Exceptions -exclusions Extra premium Free look Grace period Health insurance Hospital expense insurance Indemnity Indexation of pre-disability earnings Integration clause Issue and participation limits Lifetime disability benefit Malingering Medical attendance Medical examination Miscellaneous expenses Morbidity tables Non-cancellable policies Non-confining sickness Non-economic loss (NEL) Non-disabling injury Non-occupational policy Nursing expense provision Occupational classifications Occupational hazard Occupational injury Partial disability Permanent disability Pre-existing condition Pre-disability income Qualifying period Recurrence clause Reduction of benefits Rehabilitation benefit Rider Sickness insurance Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Total disability Total disability waiver of premium (TDWP) Travel accident policy Waiting period Waiver Waiver of premium disability benefit Advocis LLQP 2012 TFAAC 14

15 Accident and Sickness Insurance Study Session 5 Business Applications for Disability Income Insurance Taxation of Health Insurance Premiums and Benefits Basics of Critical Illness and Long-Term Care Insurance To do Module 3: Accident and Sickness Insurance Read pages 3-23 to 3-50 Complete end-of-module questions 22 to 40 Total reading: 27 pages Learning Objectives Distinguish among key person disability coverage, disability buyout coverage, and business overhead expense coverage. Describe the tax implications of various types of individual disability insurance policies Describe the various provisions included in an Accident and Sickness insurance policy including, renewal, grace period, incontestability, pre-existing condition, claims, physical examination, change of occupation, and over insurance. Describe examples of conditions covered under a critical illness policy. Describe and provide examples of conditions that are covered under a long-term care policy. Select the most appropriate products from among disability income, accident and sickness, critical illness and long term care insurance to meet a client s needs Study Guide Reference Business Applications For Disability Income Insurance The Tax Treatment of Individual Disability Benefits Taxation of Government, Group, and Individual Plans Tax Treatment of Private Health Insurance and Government Plans POLICY PROVISIONS Renewal Feature Grace Period Incontestability Clause Pre-existing Conditions Clause Claims Clause Physical Examination Clause Change of Occupation Clause Over (Excess) Insurance Critical Illness Insurance (CI) Long Term Care Insurance (LTC) Case study analyses: Joyce Thompson Doug Thompson Advocis LLQP 2012 TFAAC 15

16 Key Terms - Study Session 5 Accident Accidental bodily injury Accidental death and dismemberment benefit Accidental dismemberment Accident and sickness insurance Accidental means Aggregate limit clause Benefit Benefit period Blue Cross Business insurance Business buy-out Buy-sell agreement Commercial policies Contract Declaration Disability Disability (income) insurance Dismemberment clause Elimination period Endorsement Exceptions -exclusions Extra premium Free look Grace period Health insurance Hospital expense insurance Indemnity Indexation of pre-disability earnings Integration clause Issue and participation limits Lifetime disability benefit Malingering Medical attendance Medical examination Miscellaneous expenses Morbidity tables Non-cancellable policies Non-confining sickness Non-economic loss (NEL) Non-disabling injury Non-occupational policy Nursing expense provision Occupational classifications Occupational hazard Occupational injury Partial disability Permanent disability Pre-existing condition Pre-disability income Qualifying period Recurrence clause Reduction of benefits Rehabilitation benefit Rider Sickness insurance Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Total disability Total disability waiver of premium (TDWP) Travel accident policy Waiting period Waiver Waiver of premium disability benefit Advocis LLQP 2012 TFAAC 16

17 Group Insurance Study Session 6 Important Aspects of Group Life Insurance To do Module 4: Group Insurance Read pages 4-1 to 4-27 Complete end-of-module questions 1 to 21 Total reading: 27 pages Learning Objectives Explain the definitions of: group insurance, member, group policyholder and waiver of premium benefit. Compare and contrast individual and group insurance products. Explain the terms deductible and co-insurance and how they impact benefit payments. Explain the relationship among credibility, manual rating, experience rating, and blended rating. Compare and contrast the following funding methods: non-refund accounting, refund accounting and administrative services only (ASO). Determine how a primary and secondary carrier would coordinate benefits. Compare basic A D&D and voluntary AD &D and how employees qualify for each Study Guide Reference Group Insurance Definitions Group Insurance Member Policyholder Waiver of Premium Advantages of Group Benefit Programs: a comparison of the basic principles of group and individual insurance contracts Deductibles and Co-insurance: How they Impact Benefit Payments Methods For Calculating Group Insurance Premium Rates Funding Mechanisms Coordination Of Benefits (COB) Accidental Death and Dismemberment (AD&D) Voluntary Accidental Death and Dismemberment Plans Advocis LLQP 2012 TFAAC 17

18 Key Terms- Study Session 6 Accident Accidental bodily injury Accidental death and dismemberment benefit Accidental death benefit (ADB) Accidental dismemberment Accident and sickness insurance Accidental means Administrative services only (ASO) Adverse selection Agent (life insurance) Aggregate limit clause Association group insurance Beneficiary Benefit Benefit period Blue Cross Catastrophic loss Certificate of insurance Claim Claimant Classification Coinsurance Contract Death benefit Deductible Dental benefits Disability Disability (income) insurance Dismemberment clause Double indemnity clause Duplicate coverage Effective date Eligible expenses Elimination period Employee booklet Endorsement Evidence of insurability Exceptions -exclusions Expense loading Experience rating Expiry date Extended health care insurance Flat deductible Fraternal Insurance Counselor (FIC) Fraternal society Fundamental group principles Future insurance option Group annuity contract Group conversion privilege Group insurance Group life insured Guaranteed renewable Health insurance Hospital expense insurance Indemnity Indexation of pre-disability earnings Insurable interest Insured Integration clause Intentional injury Issue and participation limits Life insurance Life insurance company Life insured Lifetime disability benefit Long-term disability (LTD) Lump sum Major medical expense benefit Malingering Master policy Material facts Maturity date Maximum tax actuarial reserve (MTAR) Medical attendance Medical examination Miscellaneous expenses Misrepresentation Misstatement of age Morbidity tables Mortality deductions Mortality table (and experience) Mortgage insurance Non-cancellable policies Non-contributory group plan Non-confining sickness Non-economic loss (NEL) Non-disabling injury Non-occupational policy Non-occupational policy Non-participating insurance Non-smoker Non-smoker policies Nursing expense provision Nursing home provision Occupational classifications Occupational hazard Occupational injury Out-of-province coverage Overhead insurance Over-insured Permanent insurance Permanent disability Personal insurance Person insured Physical hazard Physical impairment Population mortality table Pre-existing condition Pre-disability income Qualifying period Recurrence clause Advocis LLQP 2012 TFAAC 18

19 Rehabilitation benefit Reimbursement policy Relation of earnings to insurance Renewable term insurance Renewal Risk Schedule Schedule type policy Self-insured group Settlement options Sickness insurance Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Substandard (impaired) risk Suicide clause Sum insured Supplementary major medical expense coverage Term of policy Term life insurance Term to 100 Third-party administration (TPA) Total disability Total disability waiver of premium (TDWP) Travel accident policy Unallocated benefit Waiting period Waiver Waiver of premium disability benefit Workers Compensation Advocis LLQP 2012 TFAAC 19

20 Group Insurance Study Session 7 Important Aspects of Group Disability Insurance Basics of Dental Care and Group Accident & Sickness Insurance To do Module 4: Group Insurance Read pages 4-28 to 4-45 Complete the end of module questions 22 to 50 Complete the 3 Group Insurance Case Studies/Sample Questions identified on page 4-46 Total reading: 19 pages Learning Objectives Compare the definitions of disability, as used by short- and long-term income replacement plans. Describe the features and coverages of a group disability plan, and how the plan functions Explain the impact of coordination of benefits and subrogation on a group disability insurance policy. Discuss the limitations and exclusions usually found in employer-sponsored group A&S plans. Describe a typical dental plan, including coverages and coordination of benefits Describe an extended health plan, including coverages and coordination of benefits, Study Guide Reference Group Disability Plan Short-term Disability Long-term Disability Features And Coverages Of A Group Disability Plan Partial Disability Benefits Recurrent Disability COLA adjustment Direct Offsets Continuation Of Benefits Termination Of Benefits Waiver Of Premium Pre-Existing Conditions Standard Exclusions and Limitations Coordination of Benefits and Third-party Subrogation Limitations and Exclusions of an Employersponsored Group Accident and Sickness Plan Dental Care Medical Services Available under Employersponsored Group Accident and Sickness (A&S) Plans Advocis LLQP 2012 TFAAC 20

21 Key Terms - Study Session 7 Accident Accidental bodily injury Accidental death and dismemberment benefit Accidental death benefit (ADB) Accidental dismemberment Accident and sickness insurance Accidental means Administrative services only (ASO) Adverse selection Agent (life insurance) Aggregate limit clause Association group insurance Beneficiary Benefit Benefit period Blue Cross Catastrophic loss Certificate of insurance Claim Claimant Classification Coinsurance Contract Death benefit Deductible Dental benefits Disability Disability (income) insurance Dismemberment clause Double indemnity clause Duplicate coverage Effective date Eligible expenses Elimination period Employee booklet Endorsement Evidence of insurability Exceptions -exclusions Expense loading Experience rating Expiry date Extended health care insurance Family deductible Flat deductible Fraternal Insurance Counselor (FIC) Fraternal society Fundamental group principles Future insurance option Group annuity contract Group conversion privilege Group insurance Group life insured Guaranteed renewable Health insurance Hospital expense insurance Indemnity Indexation of pre-disability earnings Insurable interest Insured Integration clause Intentional injury Issue and participation limits Life insurance Life insurance company Life insured Lifetime disability benefit Long-term disability (LTD) Lump sum Major medical expense benefit Malingering Master policy Material facts Maturity date Maximum tax actuarial reserve (MTAR) Medical attendance Medical examination Miscellaneous expenses Misrepresentation Misstatement of age Morbidity tables Mortality deductions Mortality table (and experience) Mortgage insurance Non-cancellable policies Non-contributory group plan Non-confining sickness Non-economic loss (NEL) Non-disabling injury Non-occupational policy Non-occupational policy Non-participating insurance Non-smoker Non-smoker policies Nursing expense provision Nursing home provision Occupational classifications Occupational hazard Occupational injury Out-of-province coverage Overhead insurance Over-insured Permanent insurance Permanent disability Personal insurance Person insured Physical hazard Physical impairment Population mortality table Pre-existing condition Pre-disability income Qualifying period Advocis LLQP 2012 TFAAC 21

22 Recurrence clause Rehabilitation benefit Reimbursement policy Relation of earnings to insurance Renewable term insurance Renewal Risk Schedule Schedule type policy Self-insured group Settlement options Sickness insurance Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Substandard (impaired) risk Suicide clause Sum insured Supplementary major medical expense coverage Term of policy Term life insurance Term to 100 Third-party administration (TPA) Total disability Total disability waiver of premium (TDWP) Travel accident policy Unallocated benefit Waiting period Waiver Waiver of premium disability benefit Workers Compensation Advocis LLQP 2012 TFAAC 22

23 Underwriting Policy Issue and Claims Study Session 8 Important Responsibilities of the Agent in the Application and Claims Processes To do Module 5: Underwriting Policy Issue and Claims Read entire module Complete all end-of-module questions (50) Complete 4 Underwriting, Policy Issue and Claims Case Studies/Sample Questions identified on pages 5-36 Total reading: 36 pages Learning Objectives Explain the agent s duty to educate the client in the consequences of incorrect information being provided for the underwriting process. Describe the key components of the life insurance application as they affect the underwriting process, including agent comment section, accurate completion of medical questions, financial information and product selection. Explain the impact of incomplete or inaccurate information in the application. Explain what a Temporary Insurance Agreement is, how it impacts the applicant and the limitations associated with the issuance of the TIA. Describe the steps that head office undertakes in processing an application for life insurance when it is received from the field, including doctor s medical, attending physician s statement, inspection reports, medical information bureau, hazardous sports and occupations, financial underwriting, etc. Describe the agent s responsibilities in delivery of the insurance contract, including right of rescission, and proof of delivery and when there has been a change in the health of the insured. Study Guide Reference The Importance of Accurate Field Underwriting Completing the Application Form The Impact of Gathering Incomplete Or Inaccurate Information in the Field Underwriting (Application) Process The Temporary Insurance Agreement Dealing with an Application Delivering the Insurance Contract Advocis LLQP 2012 TFAAC 23

24 Key Terms - Study Session 8 Absolute assignment Accident Accidental bodily injury Accidental death and dismemberment benefit Accidental death benefit (ADB) Accidental dismemberment Accident and sickness insurance Accidental means Additional provisions Adjustment income Administrative services only (ASO) Adverse selection Age admitted Age adjustment Age at issue Age limits Agent (life insurance) Aggregate limit clause Allocated benefits Amount at risk Annuitant Annuitization Anti-selection Apparent authority Arm s length Application Assignee Assignment Assignor Association group insurance Assurance/insurance Assuris Attained age Beneficiary Benefit Benefit period Blue Cross Broad form Bundled Business insurance Business buy-out Buy-sell agreement Catastrophic loss Claim Claimant Classification Collateral assignment (insurance) Coinsurance Commercial policies Common disaster clause Conditional insurance agreement Consideration Consideration clause Contingent owner Contract Contract of life insurance Contributions Convertible term insurance Conversion privilege Conversion ratio (rate) Corporation insurance Cut-off provision Days of grace Death benefit Declaration Decreasing term insurance Deductible Disability (income) insurance Disclosure Dismemberment clause Double indemnity clause Duplicate coverage Effective date Eligible expenses Elimination period Evidence of insurability Exceptions -exclusions Exempt policy Exemption test policy Expense loading Experience rating Expiry date Extended health care insurance Extended term insurance Extra premium Face amount Free look Front-end load Fundamental group principles Future insurance option Incontestability Indemnity Individual insurance Insurable interest Insured Integration clause Intentional injury Interest-rate-sensitive policy Issue and participation limits Key person insurance Lapse Lapsed policy Last acquired Last expenses Life expectancy Life insurance Life insurance company Life insured Lifetime disability benefit Limited payment life insurance Advocis LLQP 2012 TFAAC 24

25 Long-term disability (LTD) Lump sum Major medical expense benefit Malingering Material facts Maturity date Medical attendance Medical examination Miscellaneous expenses Misrepresentation Misstatement of age Morbidity tables Mortality deductions Mortality table (and experience) Non-smoker Non-smoker policies Nursing expense provision Nursing home provision Occupational classifications Occupational hazard Occupational injury Overhead insurance Over-insured Person insured Physical hazard Physical impairment Policy Policy term Policy dividend Policy fee Policy loan Policyholder Policyowner Policy reserves Population mortality table Pre-existing condition Pre-disability income Preferred risk Private corporation Prorating Public corporation Qualifying period Quick-pay Rate of mortality Rated policy Recurrence clause Rehabilitation benefit Reimbursement policy Reinstatement Relation of earnings to insurance Replacement Representation Rider Risk Schedule Schedule type policy Settlement options Sickness insurance Single premium Small business corporation Smoker Special class Standard or statutory provisions Standard risk Statutory conditions Substandard (impaired) risk Suicide clause Sum insured Supplementary major medical expense coverage Surrender Surrender charge Surrender value Survivorship life annuity Temporary insurance agreement Total disability Total disability waiver of premium (TDWP) Travel accident policy Underwriting Waiting period Waiver Waiver of premium disability benefit Warranties Advocis LLQP 2012 TFAAC 25

26 Professional Standards Common Law, Contract Law & Life Insurance Study Session 9 Important Aspects of the Agent s Obligations and Duties to the Client and Insurance Company To do Module 6: Professional Standards Read entire module Complete all end-of-module questions (45) Module 7: Common Law, Contract Law and Life Insurance Read entire module Complete all end-of-module questions (21) Complete Common Law, Contract Law and Life Insurance Case Study/Sample Question identified on pages 7-13 Total reading: 53 pages Learning Objectives Describe the implications of the regulations governing the distribution of insurance products as they relate to the criminal code in regard to misrepresentation, theft, and forgery. Explain how Errors and Omissions insurance would respond to a consumer loss. Explain the responsibilities and obligations of the agent in an agent-client relationship, including agency law. Explain the agent s duties pertaining to the client, including disclosure, putting the client s interest first, coercion, undue influence, due diligence, etc. Analyze the responsibilities of the agent with respect to his/her role with the client and the insurance company. Study Guide Reference The Agent s Legal Role in the Underwriting and Contracting Process The Benefits of Errors and Omissions Insurance The Fiduciary Responsibilities of an Agent to His or Her Clients The Law of Agency The Fiduciary Duties of an Agent The Rules of Agent Conduct The Application of the Know your Client Rule The Fiduciary Responsibilities of an Agent to His or Her Clients The Nature of the Law of Agency The Fiduciary Duties of an Agent The Rules of Agent Conduct The Application of the Know your Client Rule The Fiduciary Responsibilities of an Agent to His or Her Clients The Nature of the Law of Agency The Fiduciary Duties of an Agent The Rules of Agent Conduct The Application of the Know your Client Rule Advocis LLQP 2012 TFAAC 26

27 Key Terms - Study Session 9 Actual authority Actuary Agent (life insurance) Anti-selection Apparent authority Arm s length Application Assurance/insurance Assuris Authority Canadian Council of Insurance Regulators, Canadian Institute of Chartered Life Underwriters and Chartered Financial Consultants (The) Canadian Life and Health Insurance Association Inc. (CLHIA) Canadian Deposit Insurance Corporation (CDIC) Certificate of insurance Chartered Financial Consultant (CH.F.C.) Chartered Life Underwriter (CLU) Churning Claim Claimant Classification Consumer Protection Plan Disclosure Fiduciary Financial planning Fraternal insurance Fraternal Insurance Counselor (FIC) Fraternal society Licence Life insurance company Misrepresentation Permanent insurance Permanent disability Personal insurance Person insured Physical hazard Physical impairment Policy Policy term Policy dividend Policy fee Policy loan Policyholder Policyowner Policy reserves Premium Premium mode Premium notice Premium offset Premium reduction Premium taxes Principal Rebating Reinstatement Relation of earnings to insurance Replacement Representation Secret profit Standard or statutory provisions Statutory conditions Stock insurance company Twisting Unfair competition or practice Uniform Life Insurance Act Unilateral contract Advocis LLQP 2012 TFAAC 27

28 Investment Products Fundamentals of Insurance Investments Study Session 10 Important Aspects of Insurance Investments and their Provisions Emphasizing the Special Duties for IVICs Important Provisions of Annuities and Related Products Determining the Best Product for the Client To do Module 8: Investment Products Other Than Life Insurance Read entire module Complete all end-of-module questions (33) Total reading: 49 pages Learning Objectives Compare the differences between an insurance company deferred annuity and a GIC issued by banks and trust companies. Explain the withdrawal rights, and the impact of market value adjustments on withdrawals. Determine an overall investment strategy and recommend the most appropriate products using various insurance company investment products. Determine what happens when a client withdraws a portion of the funds invested in an IVIC with respect to the guarantee for maturity. Include such concepts as proportional and linear reduction methods, maturity and death benefit guarantees, adjusted cost basis, etc. Describe the decision-making process to be used when determining the appropriate investment options to meet the risk tolerance of the client. Study Guide Reference The Deferred Annuity Compared with a Guaranteed Investment Certificate (GIC) Withdrawal Rights and Market Value Adjustments with Annuities Case study analysis at the end of module 9 The Impact of Withdrawals on IVIC Guarantees Risk Management Case study analysis at the end of module 9 Advocis LLQP 2012 TFAAC 28

29 Key Terms - Study Session 10 Annuitant Annuitization Annuity Anti-selection Back-end charges Bearer bonds Bond Callable bond Canada Savings Bonds Cash refund annuity Closed-end fund Common stock (shares) Consumer Price Index (CPI) Convertible bond Convertible preferred share Conversion ratio (rate) Corporate bond Corporate dividends Coupon bond Creditor protection Creditors Cumulative preferred shares Debenture Deferred annuity Equities First mortgage bond Fixed annuity Government of Canada bond Group annuity contract Guaranteed investment certificate (GIC) Immediate annuity Impaired annuity Information statement Investment company, fund or trust Issued stock Joint life and (last) survivor annuity Joint life annuity Life annuity Mutual fund No-load funds Non-cumulative preferred shares Non-exempt annuity contract Participating shares Public corporation Redeemable preferred shares Securities Segregated funds Stock Stripped bond Survivorship life annuity Treasury bill Trust Trustee Variable annuity Variable contract Variable life Advocis LLQP 2012 TFAAC 29

30 Investment Products Fundamentals of Insurance Investments Study Session 11 Industry Guarantees for Consumer Protection Important Aspects of IVICs and the Agent s Duties in Selling Them Important Information on Risk Management, Particularly Investment Risk To do Module 9: Fundamentals of Insurance Investments Read entire module Complete all end-of-module questions (32) Complete 3 Fundamentals of Insurance Investments Case Studies/Sample Questions identified on pages 9-40 Total reading: 49 pages Learning Objectives Compare the consumer protection compensation funds available for IVICs, securities and bank offered investments. Explain the valuation process for IVICs Determine the impact on the client of the distinguishing features of segregated funds, including maturity guarantee, death benefit, creditor protection, reset options, and exemption from probate. Explain the content and purpose of the Information Folder and the benefits it brings to a client. Compare and contrast the investment instruments, risk and volatility of various types of funds, including: money market funds, mortgage funds, bond funds, dividend funds, equity funds, international and global funds, specialty funds, real estate funds, balanced funds, asset allocation funds, index funds and fund of funds. Explain the various sales charge options and loads available, and their impact on the investment decision. Differentiate between a segregated fund and a mutual fund in terms of product approval, rules governing the product, CLHIA guidelines, sales licensing requirements, taxation, valuation, and ownership of assets. Describe the advantages and disadvantages of various life insurance investment vehicles as compared to non-insurance investment vehicles. Study Guide Reference Safety And Regulation Of Banking In Canada (Module 1) Assuris Limits (Module 9) Unitization The Benefits Of Investing In Segregated Fund Policies Summary Information Folders Requirements of the CLHIA Guidelines on IVICs Risk Management (Module 9) The Nature of Investment Risk (Module 8) Withdrawal Rights and Market Value Adjustments with Annuities Individual Variable Insurance Contracts (IVICS Segregated Funds) (Module 9) Mutual Funds (Module 8) Non-insurance investments (Module 8) Insurance investments (Module 9) Advocis LLQP 2012 TFAAC 30

31 Key Terms - Study Session 11 Annuitant Annuity Anti-selection Back-end charges Bearer bonds Bond Callable bond Canada Savings Bonds Cash refund annuity Closed-end fund Common stock (shares) Consumer Price Index (CPI) Convertible bond Convertible preferred share Conversion ratio (rate) Corporate bond Corporate dividends Coupon bond Creditor protection Creditors Cumulative preferred shares Debenture Deferred annuity Equities First mortgage bond Fixed annuity Government of Canada bond Group annuity contract Guaranteed investment certificate (GIC) Immediate annuity Impaired annuity Information statement Investment company, fund or trust Issued stock Joint life and (last) survivor annuity Joint life annuity Life annuity Mutual fund No-load funds Non-cumulative preferred shares Non-exempt annuity contract Participating shares Public corporation Redeemable preferred shares Securities Segregated funds Stock Stripped bond Survivorship life annuity Treasury bill Trust Trustee Variable annuity Variable contract Variable life Advocis LLQP 2012 TFAAC 31

32 Retirement Study Session 12 Ways of Assisting the Client in Retirement Planning Retirement Products and their Application To do Module 10: Retirement Read entire module Complete all end-of-module questions (27) Complete 5 Retirement Case Studies/Sample Questions identified on pages Total reading: 78 pages Learning Objectives Using examples, describe the advantages of pension income splitting Describe what a pension adjustment (PA) is, and what affect it will have on an RRSP contribution. Describe the advantage of income splitting through spousal RRSPs. Develop a retirement plan at different ages using client-specific information. Develop a plan for a client who has decided to retire. Show the advantages of how income splitting between spouses can help reduce taxes for both pre-and post-retirement. Describe the tax consequences of a payment flow from a RRIF. Describe what happens to the balance of a RRIF upon death. Describe the tax consequences of a payment flow from a LIF. Describe what happens to the balance of a LIF upon death. Explain the value of having a Tax Free Saving Account in a client s portfolio. Explain the value and use of Registered Disability Savings Plans. Design a pre and post retirement plan using the most appropriate products. Study Guide Reference Pension Income Splitting The Retirement Savings System: Pension Adjustments Spousal RRSPs Case Study Analyses: Peter and Wendy Deerling The Opperman Case Pre/Post Retirement Case Study: The Polanskis Spousal RRSPs Registered Retirement Income Funds: Payments out of a RRIF Registered Retirement Income Funds: Death of the RRIF annuitant Life Income Funds: LIF Payments Life Income Funds: Death of the annuitant Tax-Free Savings Accounts Registered Disability Savings Plans Refer to the Pre/Post Retirement Case Study: The Polanskis Advocis LLQP 2012 TFAAC 32

33 Key Terms - Study Session 12 Annuitant Annuitization Annuity Canada Pension Plan (CPP) CPP/QPP sharing Career average earnings registered pension plan Cash refund annuity Contributory group plan Deferred annuity Defined benefit pension plan Defined contribution pension plan Deposit administration contracts Fixed annuity Guaranteed Income Supplement (GIS) Guaranteed insurability benefit (GIB) Immediate annuity Impaired annuity Income splitting Joint life and (last) survivor annuity Joint life annuity Life annuity Money purchase plan Old Age Security Pension (OAS) Past service Pension adjustment Pension adjustment reversal Refund of premiums Registered life insurance Registered pension plan (RPP) Registered retirement income fund (RRIF) RRIF minimum payment Registered retirement savings plan (RRSP) RRSP over-contribution Spousal RRSP Spouse Tax shelters Term certain annuity Vesting Advocis LLQP 2012 TFAAC 33

34 Taxation Needs Analysis Study Session 13 What the Agent Needs to Know About Taxation, and When to Engage a Tax Professional Relevant Calculations an Agent Should be Able to Perform Issues Related to Performing a Financial Needs Analysis To do Module 11: Taxation Read entire module Complete all end-of-module questions (47) Complete 8 Taxation Case Studies/Sample Questions identified on pages Module 12: Needs Analysis Read entire module Complete all end-of-module questions (40) Total reading: 85 pages Learning Objectives Identify individual situations where a life agent should recommend that a client should seek independent tax advice. Identify individual situations where insurance can be used as a strategy to address and resolve tax issues. Identify business situations where insurance can be used as a strategy to address and resolve tax issues. Demonstrate the use of an insurance policy as a tax-planning tool. Recommend the types and amounts of insurance required to provide for financial needs for an individual and their family. Demonstrate proficiency in performing a variety of mathematical calculations involving addition, subtraction, multiplication, division, fractions, ratios, percentages, etc., for life insurance applications. Using typical insurance mathematical formulas and concepts prepare reports for insurance applications, demonstrating proficiency. Select the most appropriate insurance products (life, health and/or disability) to match a client s situation/needs. Design and develop a financial needs analysis for a client to reduce the severity and frequency of risk covering the areas of retirement planning, investment planning, tax planning and estate planning. Using an effective financial planning process, develop a strategy to address a client s ongoing financial needs. Study Guide Reference When should clients consult a tax professional Personal tax-related applications for life insurance Business Tax-Related Applications For Life Insurance Review sections on personal and business taxrelated applications for life insurance Researching product availability The Mathematics of Insurance Premium Calculations Modal Premium Calculations The Economic Value of a Human Life Co-insurance and Deductible Factors Personal Financial Planning and Life Insurance Insurance and Risk Management Strategies Insurance and Risk Management Strategies The Martin Case Advocis LLQP 2012 TFAAC 34

35 Key Terms - Study Session 13 Account value Accrual rules Adjusted cost base (ACB) Adjusted cost basis (ACB) Attribution rules Average tax rate Balanced financial planning Buy-sell agreement Capital cost allowance (CCA) Capital gain or loss Capital property Capital stock Capitalized value Corporate dividends Corporation insurance Cost base Creditor protection Creditor s group insurance Creditors Crystallization Dividend tax credit Dollar cost averaging Financial planning Income splitting Intestate One Ledger cost Leverage Liquidity Marginal tax rate Maximum tax actuarial reserve (MTAR) MTAR Net cost Net cost of pure insurance (NCPI) Partnership insurance Policy reserves Premium taxes Present value of future benefits Private corporation Public corporation Recapture of capital cost allowance Rule of 72 Small business corporation Taxable income Tax shelters Testate Testator Time value of money Trust Trustee Unbundled Undepreciated capital cost (UCC) Will Withholding tax Advocis LLQP 2012 TFAAC 35

36 Advocis / Foran LLQP Suggested Study Schedule WITH KEY TERMS Advocis LLQP 2012 TFAAC 36