LLQP (Life Licence Qualification Program) Practice Exam · Question
Which of the following scenarios would lead to an increase in the Adjusted Cost Basis (ACB) of a non-exempt life insurance policy?
The Adjusted Cost Basis (ACB) of a life insurance policy increases with additional premium payments and decreases with policy loan repayments, policy dividends,
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Question: Which of the following scenarios would lead to an increase in the Adjusted Cost Basis (ACB) of a non-exempt life insurance policy?
Answer options:
- Payment of a policy loan from the insurer.
- Declaration of a policy dividend by the insurer.
- Increased cash surrender value due to investment growth. ✅ Additional premium payments made by the policyholder.
Correct answer: Additional premium payments made by the policyholder.
Explanation: The Adjusted Cost Basis (ACB) of a life insurance policy increases with additional premium payments and decreases with policy loan repayments, policy dividends, and net cost of pure insurance. Investment growth or CSV increases do not directly impact ACB.
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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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