LLQP Life Insurance Cheatsheet — High-Yield Rules, Checklists, and Pitfalls

Use this as your last‑mile review. Pair it with the Syllabus for coverage and Practice for speed.

If you like the structure of our CSI cheatsheets (tables + decision rules + glossary), this page is intentionally similar—just applied to provincial LLQP Life Insurance prep.

LLQP Life Insurance in one picture (process > trivia)

    flowchart TD
	  A["Client story"] --> B["Fact-find (what matters?)"]
	  B --> C["Needs analysis (what problem?)"]
	  C --> D["Product fit (what structure?)"]
	  D --> E["Application + underwriting (what evidence?)"]
	  E --> F["Recommendation + delivery (what’s documented?)"]
	  F --> G["Service + review (what changes?)"]

Exam reflex (works like a cheat code):

• Goal: what outcome is the client trying to achieve?
• Constraint: what’s the tightest limit (budget, time horizon, underwriting reality, legal/estate context)?
• Next step: what is missing (facts, documentation, suitability, signatures/consents)?

Assess Needs and Situation (35%)

Fact-find checklist (what you want in every stem)

Best‑answer elimination rule: if options jump to a product before the stem supports a clear need, the safer answer is often gathering missing facts or clarifying objectives.

Quick stem scan (five buckets)

• Income replacement: dependents, duration of dependency, survivor income sources.
• Debt & obligations: mortgage, loans, business debt, guarantees.
• Final expenses: funeral, legal/estate costs, immediate liquidity.
• Tax at death (high level): liquidity needs, estate equalization, charitable intent.
• Existing resources: savings, existing policies, group coverage, pensions/benefits (CPP/QPP).

Exam habit: if a key fact is missing (age, dependents, debts, income stability), the “best” answer often focuses on gathering information before recommending.

Needs analysis: a practical “coverage target” formula (concept)

Coverage need is usually framed as:

Coverage ≈ (income replacement) + (debts/obligations) + (final + estate costs) + (tax/liquidity needs) − (existing resources + existing coverage).

Where “income replacement” means: how much cash flow survivors need, and for how long (until children are independent, until retirement, etc.).

Income replacement (how it’s tested)

LLQP questions rarely require finance math. They usually test whether you:

• choose the right time horizon (temporary vs lifelong)
• identify the missing facts (dependents, survivor income, debts)
• recognize when the correct move is term coverage + review later (budget/time-limited need)

“Hidden needs” that show up in stems

• Estate liquidity: “tax at death”, “business”, “cottage”, “illiquid assets”
• Debt payoff: “mortgage”, “co‑signed”, “guaranteed loans”
• Family structure risk: “blended family”, “minor children”, “estranged spouse”
• Coverage fragility: “group coverage”, “contract/temporary job”, “recent diagnosis”

Underwriting reality checks (don’t ignore them)

Underwriting answers “is the risk acceptable, and at what price?” Common drivers:

• health history (including family history), build, blood pressure, etc. (concept)
• smoker status
• hazardous avocations/occupation
• amount requested vs income/net worth (anti‑selection concern)

Exam cue: if underwriting is uncertain and the need is temporary, a defensible answer often emphasizes affordability + insurability management (e.g., right‑sizing face amount, choosing a structure that can be reviewed later).

Analyze Products That Meet the Need (30%)

Term vs permanent: fast decision table

Term insurance: what matters (high yield)

• Level term: premiums usually level for the term period.
• Renewable term: can extend coverage at the end of the term (typically at higher cost as age increases).
• Convertible term: ability to convert to permanent coverage without new evidence of insurability (policy-specific).
• Term length selection: match the term to the need horizon (e.g., until retirement, until mortgage maturity, until children are independent).

Trap: choosing permanent when the stem screams “budget constrained + temporary need”.

Permanent insurance: whole life vs universal life (high level)

Participating vs non-participating (whole life context)

• Participating (par): can receive dividends based on insurer experience; dividends are not guaranteed.
• Non‑par: no dividends; benefits are defined by contract.

Dividend options (common): cash, premium reduction, accumulation at interest, paid‑up additions, one‑year term (options vary by policy).

Joint life insurance (when it’s used)

Riders and add‑ons (common ones)

• Waiver of premium / payor benefit: helps keep coverage in force if disability occurs (rider terms vary).
• Accidental death benefit (ADB): extra benefit for accidental death (limited scope).
• Guaranteed insurability option: ability to buy more coverage at specified dates/events without new medical (rider-specific).
• Child term rider: coverage for children (details vary).

Exam cue: riders are rarely the core answer unless the stem explicitly highlights the specific risk the rider addresses.

Group life vs individual life (fast compare)

Trap: treating group life as guaranteed forever, or assuming it is always sufficient.

Implement a Recommendation Adapted to the Client (25%)

Parties to a life insurance contract (do not mix these up)

Exam cue: many questions are really testing “who has control” and “who receives the money”.

Beneficiary designations (high-yield)

• Primary vs contingent: “who gets it first” vs “backup if primary can’t”.
• Revocable vs irrevocable: irrevocable can restrict changes/assignments without consent (jurisdiction/policy rules apply).
• Minor beneficiaries: often requires planning (e.g., trustee/trust arrangement; jurisdiction-specific).
• Estate as beneficiary: proceeds flow through the estate (can add delays/probate; may be exposed to estate claims).

Assignment (when a policy is used as collateral)

Application + underwriting workflow (what to check)

Before recommending a product, confirm the implementation is feasible:

1. Insurable interest exists when the contract is created (concept; rules differ for assignment/beneficiary later).
2. Application is complete and consistent (no missing facts).
3. Medical/financial evidence is appropriate for the amount requested.
4. Any replacement disclosure/forms are handled (where applicable).
5. Delivery requirements are met (premium, signatures, confirmation of no material change if required).

Trap: ignoring disclosure risk. Many “wrong” options are wrong because they imply hiding or downplaying material information.

Replacement checklist (often tested because it’s high risk)

Replacement can be defensible, but exam answers usually require process discipline:

• compare premiums and benefits/features (convertibility, guarantees, riders, cash values, surrender charges)
• confirm what’s lost (e.g., time already elapsed toward contestability/suicide provisions; policy-specific)
• assess whether the new plan is truly better given the client’s constraints
• document rationale and client understanding

Provide Customer Service During Coverage (10%)

The servicing “big levers”

• beneficiary / ownership updates after life events
• premium mode changes and affordability reviews
• conversion decisions before term deadlines
• claims mindset: make the process smooth and documented

Lapse, reinstatement, and policy values (high level)

• Missing premiums can trigger a grace period and then lapse (timelines vary by policy).
• Reinstatement may be possible within a specified period, often with evidence of insurability and back‑premiums (policy-specific).
• Cash values / loans / withdrawals can keep a policy afloat—or accidentally cause a lapse if unmanaged (concept).

Claims basics (what’s usually required)

• death certificate + claim form + identity/beneficiary verification
• if beneficiary is the estate: additional estate documentation (concept)
• settlement may be lump sum or other options depending on the policy/insurer (concept)

Policy provisions that often drive the correct answer (exam level)

Common exam traps (high yield)

• Recommending a product before doing needs analysis or identifying missing facts.
• Assuming group coverage is permanent, portable, or sufficient.
• Mixing up owner vs insured vs beneficiary, leading to wrong control/settlement conclusions.
• Treating dividends/investment components as guaranteed.
• “Replacement by default” without comparing what’s lost and documenting why it’s better.
• Naming minors/complex family beneficiaries without acknowledging the need for proper legal planning (jurisdiction-specific).

If you’re coming from CSI cheatsheets (how to adapt)

Our CSI cheatsheets (e.g., FP I, WME, DFOL) often reward formula speed and market/product mechanics. LLQP Life Insurance rewards:

• fact‑finding discipline (what information is missing?)
• time-horizon matching (temporary vs lifelong)
• contract-role clarity (who controls, who receives, what changes require consent?)
• underwriting realism (is the recommended coverage even feasible/affordable?)

If you want an example of the CSI cheatsheet style this mirrors: /exams/csi/fp1/cheatsheet/.

Glossary (high-yield)

• Accidental death benefit (ADB) rider: provides an additional benefit if death is accidental (rider-specific limits apply).
• Absolute assignment: transfer of policy ownership rights to another party.
• Adverse selection: higher-risk individuals are more likely to buy or increase insurance, affecting pricing/underwriting.
• Attending physician statement (APS): medical report requested by an insurer from a doctor (with consent).
• Beneficiary: person/entity designated to receive policy proceeds on the insured’s death.
• Business continuation insurance (concept): insurance used to fund business obligations on death (e.g., buy‑sell, key person).
• Cash surrender value (CSV): amount available if a permanent policy is surrendered (policy-specific; may include charges).
• Collateral assignment: assignment where a lender’s interest is limited to the debt amount secured by the policy.
• Conditional receipt / temporary insurance (concept): interim coverage that may apply while underwriting is completed (terms vary).
• Contestability period (concept): time during which misrepresentation can more easily affect claim decisions (often 2 years; policy-specific).
• Conversion privilege: ability to convert term insurance to permanent coverage without new medical evidence (policy-specific).
• Cost of insurance (COI): charge for pure insurance protection (commonly referenced in universal life structures).
• Creditor protection (concept): certain designations can offer protection against creditors in some circumstances/jurisdictions.
• Death benefit: amount paid on the insured’s death per the policy contract (subject to terms).
• Dividend (participating policy): distribution based on insurer experience; not guaranteed.
• Dividend options: ways dividends can be used (cash, reduce premium, accumulate with interest, paid‑up additions, etc.; policy-specific).
• Evidence of insurability (EOI): proof (often medical/financial) used by insurers to assess underwriting risk.
• Exclusion: policy provision that removes coverage for specified risks/events (policy-specific).
• Face amount: stated amount of insurance coverage (commonly the base death benefit before adjustments).
• Grace period: period after premium due date during which coverage may remain in force (policy-specific).
• Guaranteed insurability option (GIO): rider allowing purchase of additional coverage at set times/events without new medical evidence (rider-specific).
• Group life insurance: life coverage provided through an employer/association plan.
• Human life value approach (concept): estimates coverage based on the economic value of the insured’s future earnings.
• Illustration: document showing how a policy may perform under assumptions (especially for cash value policies); assumptions may not be guaranteed.
• Incontestability clause (concept): contractual limit on contesting a policy after a period, except for specific issues (policy-specific).
• Insurable interest: a recognized relationship where the policyowner would suffer loss on the insured’s death; typically required when the policy is issued (concept).
• Irrevocable beneficiary: beneficiary designation that generally cannot be changed without consent (jurisdiction/policy rules apply).
• Joint first‑to‑die: joint policy that pays on the first death among insured lives.
• Joint last‑to‑die: joint policy that pays on the last death among insured lives.
• Key person insurance (concept): coverage to protect a business from financial loss if a key individual dies.
• Lapse: termination of coverage due to non‑payment or insufficient policy values (policy-specific).
• Level premium: premium designed to remain the same for a period (e.g., term period; policy-specific).
• Material misrepresentation: incorrect/omitted information that would influence underwriting; can affect claims (concept).
• Medical underwriting: risk assessment based on medical and lifestyle evidence (concept).
• Modal premium: premium paid monthly/quarterly/etc.; total annual cost may differ from annual pay due to modal factors (concept).
• Moral hazard: change in behaviour when protected by insurance (concept).
• Non‑participating policy: policy that does not pay dividends.
• Owner (policyowner): the person/entity that owns and controls the policy.
• Paid‑up additions (PUA): dividend option that uses dividends to purchase additional permanent insurance (policy-specific).
• Participating (par) policy: a policy eligible to receive dividends based on insurer experience; dividends are not guaranteed.
• Payor: the person/entity paying premiums when different from the owner.
• Policy loan: loan taken against a policy’s cash value (policy-specific); affects values and benefits.
• Premium: amount paid to keep coverage in force per contract terms.
• Primary beneficiary: first in line to receive proceeds.
• Proof of age: evidence to confirm insured’s age; misstatement can adjust benefits/premiums (policy-specific).
• Rating (substandard): underwriting outcome where premium is increased or benefits modified due to higher risk (concept).
• Renewable term: term coverage that can be renewed without new evidence of insurability (typically at higher cost as age increases; policy-specific).
• Revocable beneficiary: beneficiary designation that can be changed by the policyowner (subject to policy/jurisdiction rules).
• Rider: optional benefit added to a base policy (policy-specific).
• Segregated fund (concept): investment/insurance product typically covered in a different LLQP module (Seg Funds & Annuities).
• Settlement option: method of paying proceeds (lump sum, interest, annuity-like options; policy-specific).
• Smoker classification: underwriting category that materially affects pricing (concept).
• Suicide clause (concept): limitation related to suicide within an initial period (often 2 years; policy-specific).
• Surrender charge: fee applied when surrendering a policy early (policy-specific).
• Term insurance: coverage for a specific period; typically no cash value.
• Term-to-100 (concept): permanent-like structure with level premiums to a specified age; details vary by insurer/product.
• Underwriting: insurer process to assess risk and determine pricing/terms.
• Universal life (UL): policy structure combining insurance charges with an investment/account component (concept; policy-specific).
• Waiver of premium: rider that may waive premiums if certain disability conditions are met (rider-specific).
• Whole life: permanent insurance with structured premiums and cash values (concept; policy-specific).

✅ Next: use the Syllabus to pick a topic and run a short drill via Practice.