LLQP Life Insurance · Component 1.3 · 35% of the exam
A client owns real estate in another country. The needs analysis should flag that:
- foreign estate taxes or probate may apply, so professional advice should be obtained
- BCanadian life insurance proceeds cannot be used to settle a foreign tax liability
- Cforeign property is exempt from Canadian tax and requires no further consideration
- Dthe property must be sold before the client's death to avoid any difficulty
Correct answer: A) foreign estate taxes or probate may apply, so professional advice should be obtained
Another country may levy estate or inheritance tax and impose its own administration process, alongside the Canadian deemed disposition. The agent identifies the issue and refers it to a cross-border adviser.
Why the other options are wrong
- BProceeds can fund any liability the estate faces.
- CCanadian residents are taxed on worldwide property at death.
- DSelling is a decision for the client, not a requirement.
Exam tip
Foreign property means foreign rules; identify and refer.
Common mistake
Applying only Canadian rules to a client's foreign real estate.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Life Insurance module. Written against the published curriculum.
More from component 1
- A client's existing policies were all sold by another agent who has left the business. The reviewing agent should:
- A client supports an adult child with a permanent disability who will never be self-sufficient. In the needs analysis this is:
- A self-employed client's income fluctuates widely year to year. When determining the income to replace, the agent should:
- A 58-year-old client plans to retire at 65 and has a pension that will pay a survivor benefit. How does time to retirement affect the life insurance need?
- Which of the following is a capital expense arising at death, rather than an ongoing income need?
- A client is the sole income earner in a household with a stay-at-home spouse and two young children. The greatest risk that life insurance on the client addresses is:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.