LLQP Life Insurance Products & Riders Practice Questions
Life Insurance Products & Riders makes up 5 of every 50 questions on a Tigertest LLQP practice test. Here are 10 of the 20 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the harmonized LLQP's four modules, Canadian law and CCIR/CISRO guidance as of November 2026. Original questions; 50 per test, mixing the modules in proportion. Not affiliated with CISRO, any provincial regulator or the AMF.
1. A couple wants coverage only while their 20-year mortgage is outstanding, at the lowest possible premium. Which policy fits best?
- A.A universal life policy
- B.A 20-year term policy
- C.A term to 100 policy
- D.A participating whole life policy
Answer: B. Term insurance covers a set period at the lowest cost per dollar of coverage. Term to 100 and permanent policies charge for lifetime protection the couple does not need.
2. A renewable term policy renews at the end of each term without new evidence of insurability. What happens to the premium at renewal?
- A.It falls as cash value builds
- B.It is set by fresh underwriting
- C.It stays at the original rate
- D.It rises to the new age rate
Answer: D. Renewal is guaranteed, but the premium jumps to the guaranteed renewal rate for the insured's attained age. No medical evidence is asked for, so underwriting does not reset it.
3. The conversion privilege in a term policy lets the owner:
- A.Switch to permanent cover, no medical
- B.Cut the premium after a new medical
- C.Cash in the term cover early for value
- D.Add a spouse at the original rate
Answer: A. Conversion exchanges the term policy for a permanent one, up to the converted amount, with no proof of insurability, usually before a stated age or date.
4. Term to 100 coverage is best described as:
- A.A 100-year term that then renews again
- B.Coverage that pays out only on reaching 100
- C.Level premiums, little or no cash value
- D.Rising premiums and a large cash value
Answer: C. Term to 100 has level premiums to age 100 (often paid up then) and generally no cash surrender value, which keeps it cheaper than whole life.
5. A participating whole life policy pays dividends. These dividends are:
- A.Paid only when the insured dies
- B.Fixed at a rate tied to the prime rate
- C.Not guaranteed; based on results
- D.Guaranteed in the contract each year
Answer: C. Policy dividends come from the participating account's experience (investment returns, mortality and expenses) and are declared each year by the insurer, so they can change.
6. A par whole life owner wants dividends to raise the death benefit with no medical evidence. Which dividend option does that?
- A.Paid-up additions
- B.Premium reduction
- C.Accumulation on deposit
- D.Cash payment
Answer: A. Paid-up additions use each dividend as a single premium for a small block of fully paid permanent insurance, increasing the death benefit and cash value without underwriting.
7. Compared with a yearly renewable term charge, a level cost of insurance in a universal life policy:
- A.Is charged only after age 65
- B.Costs less in every policy year
- C.Rises every year with the insured's age
- D.Costs more early, less later
Answer: D. Level COI is priced to stay flat for life, so it costs more than YRT in early years and less in later years. YRT rises with age each year.
8. A universal life owner has the level death benefit option. As the account value grows, the insurer's net amount at risk:
- A.Doubles
- B.Falls
- C.Rises
- D.Stays the same
Answer: B. With the level option the face amount includes the account value, so net amount at risk (face minus fund) shrinks as the fund grows, lowering the cost of insurance. The level plus account value option keeps it constant.
9. Why does a universal life policy's account value grow free of annual tax?
- A.Its owner pays the tax in advance
- B.The policy is an exempt policy
- C.It is held in an RRSP
- D.Its fund is a seg fund
Answer: B. A policy that meets the exempt test under the Income Tax Act accumulates value tax-sheltered. Overfunding past the exempt limit risks losing that treatment.
10. Joint last-to-die coverage is often bought by a couple to:
- A.Cover the mortgage at either death
- B.Fund a child's education early
- C.Replace income at the first death
- D.Pay tax due at the second death
Answer: D. A joint last-to-die policy pays when the second spouse dies, when the deemed disposition of assets such as a cottage triggers capital gains tax. It is cheaper than two single-life policies.
Practice all 20 life insurance products & riders questions, and the rest of the 200-question bank, in the free LLQP training sets. Questions you miss come back until you have mastered them.
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