LLQP Exam Dumps : Life License Qualification Program (LLQP)

Comprehensive and Detailed Explanation:

Zaheb, as the agent, should educate employees via an information program to clarify coverage (e.g., generic vs. brand name drugs) (Chapter 8:Group Plan Specifics).

Option A: Incorrect; Alumo lacks expertise.

Option B: Incorrect; MIB doesn’t explain plans.

Option C: Correct; agent’s role.

Option D: Incorrect; insurer delegates to agent.

In a non-registered equity segregated fund, capital gains are only 50% taxable under Canadian tax rules. Amber’s investment grew by $15,000, which represents a capital gain. As per LLQP guidelines, capital gains on non-registered investments are subject to preferential tax treatment,meaning only half of the gain is added to taxable income. Therefore, only $7,500 of the gain will be taxable. This treatment is consistent with capital gains taxation principles outlined in the LLQP material, where only the taxable portion of the capital gain is reported, resulting in reduced tax liability compared to regular income​​.

This question is a direct application of the time value of money concept—specifically present value (PV)—as taught in the LLQP Segregated Funds and Annuities material. Present value “works backwards from a future date” and answers the question: how much is needed now to achieve a future savings goal. The LLQP text provides the formula:

PV = FV ÷ (1 + interest rate)ⁿ

Here, Davy’s future goal is FV = $200,000, the annual return is 3% (0.03), and the time horizon is n = 10 years. Substituting into the LLQP formula:

PV = 200,000 ÷ (1.03)¹⁰

(1.03)¹⁰ ≈ 1.343916, so:

PV ≈ 200,000 ÷ 1.343916 ≈ $148,818.9, which rounds to $148,819.

Therefore, if Davy has at least $148,819 in his RRSP today and earns an average of 3% per year for the next 10 years with no additional contributions, he should reach approximately $200,000 by age 65.

This aligns exactly with the LLQP explanation that PV calculations are used “to help a person determine how much needs to be saved today to yield a specified pension at a future date.”