LLQP (Life Licence Qualification Program) Practice Exam · Question
Maria borrowed $25,000 from her participating whole life insurance policy with a cash surrender value of $80,000. Her policy loan interest rate is 5%. If Maria dies while the loan is outstanding, and the death benefit is $150,000, how much will her beneficiaries receive (ignoring any accumulated interest on the loan)?
When a policy loan is outstanding at the time of the insured's death, the loan amount (plus any accrued interest) is deducted from the death benefit. In this ca
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Question: Maria borrowed $25,000 from her participating whole life insurance policy with a cash surrender value of $80,000. Her policy loan interest rate is 5%. If Maria dies while the loan is outstanding, and the death benefit is $150,000, how much will her beneficiaries receive (ignoring any accumulated interest on the loan)?
Answer options: ✅ $125,000
- $150,000
- $175,000
- $80,000
Correct answer: $125,000
Explanation: When a policy loan is outstanding at the time of the insured's death, the loan amount (plus any accrued interest) is deducted from the death benefit. In this case, $150,000 (death benefit) - $25,000 (loan) = $125,000.
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- 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
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