LLQP (Life Licence Qualification Program) Practice Exam · Question
Which test is used by the Canada Revenue Agency (CRA) to ensure a life insurance policy qualifies for tax-deferred growth in its savings component?
Tax-exempt life insurance policies must pass the 'MTAR' (Maximum Tax Actuarial Reserve) test. If the policy value exceeds this limit, it may become 'non-exempt'
Start free practice for LLQP (Life Licence Qualification Program) Practice Exam
374 questions · no signup required · 40 free questions per day
Question: Which test is used by the Canada Revenue Agency (CRA) to ensure a life insurance policy qualifies for tax-deferred growth in its savings component?
Answer options:
- The Adjusted Cost Base (ACB) test.
- The 10/20 Rule.
- The Net Cost of Pure Insurance (NCPI) test. ✅ The Maximum Tax Actuarial Reserve (MTAR) test.
Correct answer: The Maximum Tax Actuarial Reserve (MTAR) test.
Explanation: Tax-exempt life insurance policies must pass the 'MTAR' (Maximum Tax Actuarial Reserve) test. If the policy value exceeds this limit, it may become 'non-exempt' and subject to annual taxation on accrual.
Start free practice for LLQP (Life Licence Qualification Program) Practice Exam
374 questions · no signup required · 40 free questions per day
More about LLQP (Life Licence Qualification Program) Practice Exam
Related Questions
- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
- A personal non-registered permanent life insurance policy on Liam, a 40-year-old engineer in Montreal, has acc
- Universal life is:
More for LLQP (Life Licence Qualification Program) Practice Exam candidates
Study guides
Question explanations
- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free LLQP (Life Licence Qualification Program) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.