LLQP (Life Licence Qualification Program) Practice Exam · Question
Maria, a 55-year-old entrepreneur in Calgary, owns a universal life insurance policy with a CSV of $120,000. She made deposits totalling $80,000 into the policy, and her cumulative cost of insurance charges is $10,000. What is her Adjusted Cost Basis (ACB) for this policy?
The Adjusted Cost Basis (ACB) of a universal life insurance policy is generally calculated as the total premiums paid (deposits) less the cumulative net cost of
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Question: Maria, a 55-year-old entrepreneur in Calgary, owns a universal life insurance policy with a CSV of $120,000. She made deposits totalling $80,000 into the policy, and her cumulative cost of insurance charges is $10,000. What is her Adjusted Cost Basis (ACB) for this policy?
Answer options: ✅ $70,000
- $80,000
- $110,000
- $120,000
Correct answer: $70,000
Explanation: The Adjusted Cost Basis (ACB) of a universal life insurance policy is generally calculated as the total premiums paid (deposits) less the cumulative net cost of insurance (NCPI). So, $80,000 (deposits) - $10,000 (COI) = $70,000.
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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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