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The

LLQP Code Demystifying the Secret Behind the LLQP


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The

LLQP Code Index

Editor‟s Introduction and Comments What Is A Life Agent and What Can They Sell?

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What Is The Accident & Sickness License (LLQP)?

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Your Path To A Life Insurance License

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Five Steps To Obtaining Your Life Insurance License

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What Is The LLQP?

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Commentary On The LLQP

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LLQP Exam Process

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Provincial and Territory LLQP Resources

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LLQP Course Providers

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LLQP and Financial Services Education Resources

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What Are The Costs Involved?

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How Much Will You Invest In Your Future Career?

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LLQP Exam Writing Tips

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Provincial and Territory Regulatory Authorities

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Download SeeWhy LLQP Information Document

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FSTC Canada has strived to be as accurate and complete as possible in the creation of this informational publication, notwithstanding the fact that this does not warrant or represent at any time that the contents within are accurate due to the changing nature of the Financial Services Industry. While all attempts have been made to gather and verify information provided in this publication, the Publishers assume no responsibility for errors, omissions, or contrary interpretation of the subject matter herein. Any perceived slights of specific persons, peoples, or organizations are unintentional. In practical advice information publications and reports, like anything else in life, there are no guarantees of success with the advice given. Readers are cautioned to rely on their own judgment about their individual circumstances and to act accordingly. All readers are advised to seek services of competent professionals in areas of education, legal, business, accounting, technology, and financial advice. Published by: FSTC Canada, 92 Caplan Ave., Suite 244, Barrie, Ontario, Canada L4N 0Z7 (866) 235-7240 Editor: James Cousineau, President, FSTC Canada

Canada $29.95 A FSTC Canada Publication www.FSTCcanada.com © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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Demystifying the Secret Behind the LLQP Editor’s Comments Many times we have been asked, “What is the secret behind the LLQP? I find it so confusing. Why two LLQP exams? Why can’t I do both through your company?”. Confusing? Yes. … Secret? No. Through a lack of foresight to see what challenges would occur in understanding the new LLQP process that replaced the more simplified Level 1 and Level 2 Life Licensing system, the powers-that-be inadvertently created a two-headed monster or what appeared to be twins. In this document we demystify the LLQP process, reveal the costs involved and from where “you get what”, and why. We also provide you with information to not only speed up the learning process but how to increase the knowledge retention, successfully pass your LLQP exams and obtain your Life Insurance License/Certificate. As daunting as it may seem, the LLQP was created to increase professionalism in an industry clouded by innuendos of shady practice and agents with little knowledge of what they were talking about. New agents were, in truth, doing on-the-job training, something that should never have happened in such an important financial environment. Mentioning that you were a Life Insurance agent made people shy away from you in ignorance of what services you could actually provide for their benefit. Successfully passing the LLQP process to obtain your Life Insurance Certificate/ License now arms you with a vast amount of knowledge and process to properly advise clients in their financial affairs and help them plan for their secure future. There is no formal education requirement to become a Life Insurance Agent; however, candidates must complete a course and pass the LLQP examination. If you are not sure about whether or not the LLQP is a course that you can manage or if Life Insurance is a career option for you then consider investing $80 in the SeeWhy Financial Learning LLQP STUDY GUIDE. See page 12. IMPORTANT: read page 17 about Investing in your future career in Life Insurance © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What is a Life Insurance Agent - What Can They Sell? Life insurance agents are permitted to sell insurance products such as life insurance, accident and sickness insurance, individual variable insurance contracts (also called segregated funds), life annuities, disability insurance and critical illness insurance. Note that some provinces also require an Accident & Sickness licence to sell related products. In order to obtain a license as a life insurance agent, an applicant must: be sponsored by a licensed insurer throughout the first two years as an agent; complete the Life Insurance Agent application for their province or territory and pay the required fee; hold himself/herself out publicly and carry on business in good faith as a life insurance agent only in the name in which he/she is licensed; not be engaged in any other business or occupation that would jeopardize the agent‟s integrity, independence or competence; be of good character and reputation; be a suitable person to receive a licence and meet all the licensing requirements; complete a course and pass the examination for the Life Licence Qualification Program (LLQP); provide the respective province or territory regulatory authority with a mailing address; acquire the appropriate Errors and Omissions (E&O) insurance coverage and maintain this coverage throughout the term of the licence. In addition to the above licensing requirements, it is recommended that an applicant be familiar with the laws of their province or territory relating to the licensing of life insurance agents. Reminder! Life Insurance Agents, Brokers, and Companies should also be aware of their obligations under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This includes client identification, record keeping and reporting of certain transactions. You need to be aware of these obligations and current information can be found on the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) website: www.fintrac.gc.ca under Life Insurance. Developed by the Canadian Life and Health Insurance Association (CLHIA), the “Guidance Manual to Combat Money Laundering and Terrorist Financing” has been designed to assist life insurance agents and brokers in complying with their legal obligations under Canada's antimoney laundering and antiterrorist financing regime. A copy is available at: http://www.clhia.ca/advisors/AML_ATF_Guide_EN.pdf Above information taken from : www.fsco.gov.on.ca/english/licensing/LifeInsGuide.pdf © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What is the Accident & Sickness Insurance Licence? Is this included in the Life Insurance Licence (LLQP)? A major aspect in selling Life Insurance is the ability to also sell Accident & Sickness insurance - if you have qualified to do so. This requirement varies between provincial and territorial jurisdictions. In Ontario, for example, it is included in your Life Insurance licence but some provinces require a separate Accident & Sickness licence (the A&S component of the LLQP). In British Columbia and Alberta regulations call for a separate exam and licensing for Accident & Sickness licensing, while some other provinces have 3 licence options: Life, Life with A&S, or just A&S by itself. Generally speaking, the A&S licence may be obtained on its own without the need for a Life Insurance licence. Check with your sponsoring insurance broker for requirements in your province or territory. What insurance products can be sold with the addition of an Accident & Sickness licence? Health Insurance provides reimbursement for medical and dental costs, etc., not covered by provincial health plans. This is also known as "Extended Health Care". Travel Insurance pays medical and related expenses for persons who become ill, suffer an injury, or die while traveling outside Canada. Disability Insurance provides a periodic (usually monthly) income benefit when the individual insured is disabled and unable to work due to sickness or injury. Payments will continue for the duration of the disability, or for the benefit period stated in the policy, whichever is less. These policies are also referred to as "Disability Income" insurance. Critical Illness Insurance provides a lump sum benefit to insured persons who have incurred an insured life-threatening illness such as a heart attack, cancer, stroke, etc. This money can be used for whatever purpose(s) they wish. No actual amount of loss has to be proven, for example: simply being diagnosed as having the insured illness is sufficient to receive payment. Long-Term Care Insurance provides for the reimbursement of hospital, nursing home, or home care expenses required to assist the insured person with the basic needs of daily living. A daily benefit will normally be paid for insured persons who need some form of professional daily care as a result of an accident or illness, or simply due to aging.

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Continued … What is the Accident & Sickness Insurance Licence? Group Insurance is provided by employers/associations for life insurance, disability insurance and extended health care benefits for employees/groups of people. These insured people will be affiliated, for example: work for same employer; be members of the same association; etc. Coverage is provided by a single "master" policy and no medical evidence is required to be provided by the members of the group. The cost of insurance will be lower than if each member of the group was to purchase their own insurance policy. Provincial Hospital and Medical Insurance Plans All residents of a province are eligible for coverage under the provincial plan - subject to a residency requirement (6 months). These plans are financed jointly by the federal & provincial governments; however, some provinces may also require residents to pay a premium. Generally, all provinces (but you must remember that each province is responsible for the design and implementation of its own benefit plan) provide the following benefits: Hospital Insurance: This portion of the plan covers standard ward care, and all necessary medicines, medical procedures, and hospital services, while the patient is being treated in a provincially-approved hospital. Medical Insurance: This covers medical services, according to a provincially approved fee schedule. The plans pay varying amounts for physician services, diagnostic procedures, the services of chiropractors, osteopaths, podiatrists, and, if ordered by a physician, private duty nurses. Prescription drugs are not normally covered, but some provinces may cover prescription drugs for residents over age 65, while other provinces may apply a deductible and a co-insurance factor for residents of all ages. Note: These plans also provide for the payment of varying amounts of “out-of-province” hospital and medical costs incurred by residents. As you can see, have the addition of the Accident & Sickness licence with your Life Insurance licence greatly increases the insurance products that you have to offer and your ability to look after your prospect/client more effectively. Besides having to study the A&S component of the LLQP we strongly recommend that you also purchase the A&S study tools available for SeeWhy Financial Learning. Just like with the LLQP Study Tools and Guides, this will ensure that you successfully pass your Accident and Sickness license examination.

See page 14 for the A&S Study Tools and Guides

© 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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Your Path to a Life Insurance License Prior to the LLQP (Life Licensing Qualification Program), the process to obtain a life insurance license was far too easy. In fact, it was possible to attend a two day seminar and successfully complete the Level 1 insurance exam on the 3rd day. It was rather frightening that someone with only a few days education could then obtain a Life Insurance license and begin to advise the public on their life insurance and even investment needs (selling segregated funds). An over-haul of the Life Insurance license process was long overdue. In 2003, the LLQP was introduced with the intent of “raising the bar of entry” to the life insurance industry. Along with the increased difficulty there was a conscious effort to improve the training that new entrants would receive. Unlike many professional industries where there is only one licensing course to choose from (no competition), the life insurance industry felt it was important to give the student (prospective agent) a choice as to whose study materials they would use to prepare for the first of two required LLQP life licensing exams. The rationale behind this decision was simple. Competition usually results in better products, training, and ultimately, service. Several training companies were invited to submit applications to be official LLQP course providers. More recently, with the explosive use of computerized technology and the Internet, a new LLQP course provider was approved for a fully online LLQP certification course. While these companies were privileged to be selected as LLQP course providers, with their approval came a level of responsibility. Each provider was told by the regulator that they would be held accountable to their results. In other words, if too many of their students failed the licensing exam, they risked losing their status of being an approved LLQP course provider. For this reason, all of the LLQP course providers require you to pass their “certification” exam to demonstrate that you have a reasonable understanding of the material before being certified and qualified to write the actual provincial LLQP licensing exam. To use an analogy, it is similar to the need to graduate from high school before being admitted to university. Likewise, to attempt or challenge the actual life insurance licensing exam, you must first successfully complete a program (and exam) with one of the approved course providers. The following page lists the 5 steps to obtaining your Life Insurance license. This page © Copyright 2010 SeeWhy Financial Learning www.SeeWhyLearning.com and www.LLQP.info. Publication Copyright FSTC Canada. All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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Five Steps to Obtaining Your Life Insurance Licence 1. Enrol in a LLQP program offered by one of the approved course providers. Your choice should take into consideration the method that you feel most comfortable with or suits your specific personal needs. In-class, self-study distance learning, or multimedia assisted self-study online learning. 2. Due to the higher level of education required and intensity of the LLQP course, consider investing in additional training materials such as the easy-to-understand study notes and exam preparation questions offered by SeeWhy Financial Learning. A small investment can have a huge impact on your result. Download the Free LLQP information brochure and sample material in PDF format. www.LLQP.info/SeeWhy_LLQP_Study_Materials.pdf 3. Study and pass your selected LLQP course provider’s certification exam. 4. Successfully pass your provincial life insurance licensing exam. 5. Apply to obtain a Life Insurance certificate/licence with the regulatory authority in your province (see the reference section in this document for more information).

See page 10 for a list of recommended LLQP Providers See page 11 for LLQP Resources See page 12 for important Tips On Writing Your LLQP Exam This page Š Copyright 2010 SeeWhy Financial Learning www.SeeWhyLearning.com and www.LLQP.info. Publication Copyright FSTC Canada. All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What is the LLQP? The Life Licence Qualifying Program (The LLQP) replaces the former dual level licensing in (Life Level 1 and Life Level 2 licences) and was fully implemented on January 1st, 2003. The program is very intensive and requires considerably more knowledge and understanding that was previously the case. Applicants enrolling in the LLQP must become knowledgeable in the products and services relevant to the current financial services industry marketplace. The LLQP is designed as a practical standard based on the real life experience of life insurance agents. LLQP Courses are provided, and course fees are set, by the individual LLQP course providers. LLQP course providers are accountable for providing instruction and documents based on the course curriculum, and the courses are supervised and regulated by the various provincial and territorial regulatory authorities. Courses provided by different LLQP course providers are designed to cover the same material and are developed using the same curriculum, but can take different formats, such as classroom, correspondence, or using the Internet. Agents and prospective agents are encouraged to investigate the course options available to ensure the LLQP course selected is suitable for their needs and learning abilities.

Commentary on the LLQP New entrants in the life insurance industry are not well served by their “old guard” associates. Many of the „old guard” have still not quite twigged to the concept that new entrants are faced with a daunting process in order to become licensed life insurance agents. The Life Licence Qualifying Program (LLQP) is indeed daunting. Just like the iceberg which is 80% below the surface, so to with the LLQP. „Old style licensing regimes‟ required entrants to memorize the essentials of a 75 to 100 page booklet and simply regurgitate the contents on a 2-hour long multiplechoice exam. Surprisingly, the success rate under the old system was in the 80% to 90% range. Those agents were not that knowledgeable and were in fact condemned to learning on the job and to using their prospects as guinea pigs until they could amass sufficient expertise to get the job done properly. Not so with the LLQP. One of the stated objectives of the LLQP was to raise the bar for entry into the industry so that a new agent would be more knowledgeable and would be better positioned to properly service a more informed and demanding prospect.

© 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


10 Most industry participants agreed, in large part, with the regulators‟ efforts to raise the bar. But by the same token most agree that the bar was raised too high. Under the old regime there were between 9,000 and 10,000 new entrants a year coming into the business and usually 50% to 60% percent did not survive to enjoy their 2nd or 3rd year in the field and have explored employment opportunities outside the business. Under the LLQP regime it was both estimated, and expected, that the number of new entrants would dwindle to about a third of the previous numbers for the first couple or three years after implementation, and that the number would gradually increase to the 6,000 to 7,500 range within 5 years. It was hoped that because the new agents were more knowledgeable, that the former attrition rate of 50% to 60% would be greatly reduced. In the real world, the number of new entrants in fact dropped to about 2,500 in the first two years following implementation and they have not rebounded as expected. There is only anecdotal information, about the survival rate of new entrants and exactly how many will be “delivered” after their 3rd year in the business. The numbers are simply not there and insiders are concerned that with the huge bubble of baby boomers set to retire in the next few years that there will not be sufficient numbers of agents to continue to serve the insurance-consuming public. The LLQP, depending on the provider, now consists of some 400 to 800 pages of course materials and the objective is to have the new person to demonstrate that he/she is able to apply his/her knowledge on the 4-hour Certification Exam and subsequently on the 4-hour Provincial Licensing Exam. Both exams consist of 140 questions each, many of which are case studies. The pass rate for the Certification and Provincial Exams vary greatly by provider but it is safe to say that, overall, only about 70% to 75% of candidates actually pass the licensing exam. Gone forever are the days of simply memorizing the course material and spewing out your new found knowledge in a 2-hour “multiple guess exam”. The LLQP is a process which, like everything else in the industry, must be followed in order to ensure success. It is a process that can take at least 6 to 8 weeks to complete. There are no short cuts. With the introduction of new technologies students of the LLQP now have 3 options at their disposal to learn and obtain their LLQP learning/study materials and exam. Completely online (Internet): Excellent for those who are inconvenienced by not having education provider classrooms in their immediate vicinity, or feel more comfortable studying from home but not at ease with simply using printed material Distance Learning: Study materials are shipped to you for self-study and instructors are usually available by email or through online seminars to assist. Exam must be written at a physical location. Traditional Classroom Study and Exam: The old stand-by. Seneca College, for example. © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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LLQP (Life License Qualification Program) is a Canadian certification program under which those employed in the financial services sector obtain a certificate allowing the sale of life insurance products. The LLQP is valid in all provinces and territories except Quebec, which uses a separate system. This is an entry level program. In order to work for many companies a candidate must first complete the LLQP. Upon completion of the LLQP, it is possible for the candidate to apply to write the provincial certification exam, successful completion of which will allow the candidate to apply for a certificate (often known as a license) to sell life insurance and related products, such as annuities and segregated funds. The LLQP does not provide a designation, nor a post-nominal. Technically, most provincial insurance acts only prohibit somebody from acting as an agent if that person does not carry a certificate to sell life insurance. “Agent” is defined as one who is financially rewarded for conducting said business.

LLQP Exam Process The LLQP Exam Process today incorporates a 140 question, multiple choice exam. Writers are given four hours to complete the exam. In most jurisdictions, exam writers complete a scantron sheet. There are regular exam writes hosted in major Canadian centres, and smaller centres generally have writes on a less frequent, or as-needed basis. For example, there are exam writes every second day in Toronto, while Calgary has a write every Monday. While the exam is based on identical content in all jurisdictions, there are some differences in how the exam is conducted from jurisdiction to jurisdiction. In Saskatchewan, for example, it is necessary for a prospective agent to complete a bylaws exam concurrently with the certification exam. In most jurisdictions, a prospective agent can schedule an exam write either at any time - this is the case in [British Columbia] and [Ontario] - or upon completion of the exam offered by an LLQP provider, as is the case in [Alberta]. In [Manitoba], though, a prospective agent must have sponsorship from an insurer in place prior to being permitted to write the exam. Upon completion of the exam, results are normally available very quickly, often the next day. The passing grade in all jurisdictions is 60%. A successful writer will be permitted to go on and apply for a life insurance certificate. An unsuccessful writer will be given two more attempts, for a total of three, and then required to wait six months before writing again. If that further attempt is unsuccessful, then the candidate must wait another six months, and so on. Feedback from an unsuccessful write is generally not available. The insurance councils do not release old exam questions, nor do they indicate to candidates which questions were answered correctly or incorrectly. In some jurisdictions, it is possible to obtain a breakdown indicating, by topic, which areas a student was strong in, and where a student needs to improve.

© 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


12 Upon completion of the exam, there is no designation granted. Completion of this process simply allows somebody to apply for a certificate to work as an insurance agent. Application is done through the licensing regulatory body for the specific province. A complete list of these is available here: Alberta http://www.abcouncil.ab.ca/agents_brokers_adjusters/examination_requirements.html British Columbia http://www.insurancecouncilofbc.com/PublicWeb/LQ_LI_Individuals.html Manitoba http://www.icm.mb.ca/licinfo/index.html Newfoundland and Labrador http://www.gs.gov.nl.ca/cca/fsr/llqp/ New Brunswick http://www.gnb.ca/0381/033-e.asp Northwest Territories and Nunavut http://www.fin.gov.nt.ca Nova Scotia http://www.gov.ns.ca/finance/site-finance/media/finance/LifeLicenseNotice.pdf Ontario http://www.fsco.gov.on.ca/english/licensing/ Prince Edward Island http://www.gov.pe.ca/attorneygeneral/index.php3?number=44682&lang=E Quebec http://www.lautorite.qc.ca/clientele/futur-professionnel.en.html Saskatchewan http://www.insurancecouncils.sk.ca/life_LLQP.htm Yukon http://www.community.gov.yk.ca/consumer/insuranceact.html

Š 2010 Copyright FSTC Canada. Content providers for this document are protected by Š Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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LLQP Course Providers The Canadian Council of Insurance Regulators maintains a list of LLQP regulators. There are two distinct categories of LLQP providers. The first group represents insurers who hold a license to provide the LLQP. These insurers provide LLQP services only for their own employees and potential agents. This group includes: Combined Insurance http://www.combined.ca Freedom 55 http://www.freedom55financial.com/freedom55/english/default.asp Primerica http://www.primericacanada.ca Sun Life http://www.sunlife.ca The second group offers the LLQP to anybody who might be entering the insurance industry, or working in the industry, with somebody besides those listed in the first list. This group includes, but is not limited to:

ILS Fully online LLQP certification course and exam. Anytime, Anywhere multimedia study http://www.ilscorp.ca/mainpage.php?page=Life%20Licensing%20Qualification%20Program

Insurance Institute of Canada Traditional distance learning or in-class (all provinces except Quebec) Provides study material and a certification examination * Also Available in French https://www.insuranceinstitute.ca/insuranceeducation/Default.aspx?DN=122

NOTE: Upon successful completion of the LLQP Certification Exam students MUST WRITE the provincial LLQP exam within 1 year (12 months). Majority of information on pages 7-8-9 provided by Wikipedia (edited for website links and LLQP providers) Work is released under CC-BY-SA http://creativecommons.org/licenses/by-sa/3.0/

Š 2010 Copyright FSTC Canada. Content providers for this document are protected by Š Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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LLQP and Financial Services Education Resources LLQP Course and Exam: - The Insurance Advisor Training Centre www.theTrainingCentre.ca - Financial Services Training Courses Canada www.FinancialServicesTrainingCourses.com - The Insurance Institute of Canada https://www.insuranceinstitute.ca/insuranceeducation/Default.aspx?DN=122 - ILS Learning Corporation Www.ILScorp.ca/mainpage.php?page=Life licensing Qualification Program

LLQP

(including Accident and Sickness)

Study Guide, Study Tools

www.LLQP.info - SeeWhy Financial Learning www.SeeWhyLearning.com - Financial Services Training Courses Canada www.FinancialServicesTrainingCourses.com - Accident and Sickness www.AccidentAndSickness.com

Mutual Funds Exam Study Guide and Study Tools www.MutualFundsExam.com

Securities Exam Study Guide and Study Tools - SeeWhy Financial Learning www.SeeWhyLearning.com - Financial Services Training Courses Canada www.FinancialServicesTrainingCourses.com - The Investment Advisor Training Centre www.InvestmentAdvisorTrainingCenter.com

CE – Continuing Education Courses - Financial Services Training Courses Canada www.FinancialServicesTrainingCourses.com - The Insurance Advisor Training Centre www.theTrainingCentre.ca

Online Financial Services Information Publication - The Financial Services Training Courses Online Publication www.FSTCcanada.com © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What Are The Costs Involved To Obtain My LLQP Life License? The Life Insurance industry includes the responsibility of Financial Planning. For that very reason you also need to plan your finances and understand the costs involved, and why, to obtain your Life Insurance license. As mentioned in this document, the process involves two LLQP exams.

First is the LLQP course and exam

offered by various approved LLQP course providers. You need to determine which course and method of study that you will choose: In-Class, Self-study (distance learning), or completely online (convenient for those who would be greatly inconvenienced by travel and accommodation costs and time involved to attend classroom style instruction in large groups where you must learn at a group pace, not your own). Each provider has different fees that are charged. Below are two recommended LLQP course providers covering all learning methods to be considered. Some colleges have offered a LLQP course but the continuation each year has been inconsistent.

ILS Learning Corp: Fully online LLQP Course and Exam. professional LLQP instructor. Cost is $299.95 (all inclusive + GST)

Video, audio, and visual instruction by a

The Insurance Institute: Distance learning or in-class. On-line quizzes and support services. The Institute is the only provider of the LLQP in English and French. The Institute‟s LLQP has two learning components: 1.Life insurance, health insurance, group benefits and government programs. 2.Investments, insurance investments, taxation and retirement planning. The cost is $450 plus GST/HST for the English distance learning program and $550 plus GST/HST for the French distance learning program. The fee includes text, tuition, on-line tutorial, and certification exam.

Second is the Provincial or Territory exam available through the regulatory authority for your province or territory. See next page for more information ….. © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What Are The Costs Involved To Obtain My LLQP Life License? Continued …

The Second is the Provincial or Territory exam. Once you have passed the certification course you must register to write the Provincial Licensing Exam. The fee to write the provincial exam varies with each provincial/territorial regulatory authority. The fee ranges from $95 to $135 (at time of this document creation). For most provinces the exam is administered by the provincial of territory insurance council, however, Ontario has outsourced the exam process to Durham College (in Whitby) and they have aligned with Humber College to offer a wider range of testing centres. Another note: in some testing centres, the exam can be taken by either traditional paper or by computer. Although computer-based is cheaper and the result is available quicker, we recommend paper-based testing for the following reasons: 1. 2.

The questions are long and a good exam strategy is to circle key words, cross out wrong answers, etc. This can only be done on a paper exam. As a result, the paper based exam tends to have a higher pass rate.

VERY IMPORTANT NOTE: While you can write the provincial/territorial exam without any further study, we strongly suggest - to ensure your success on the exam - that you invest in the SeeWhy Financial Learning LLQP study materials. The provincial/territory exam is different from the LLQP course exam (just as each LLQP course exam is different also) and you have a money back guarantee on the SeeWhy Study materials if you do not pass your provincial/territory exam. Provincial exam success rates vary between 50%-85% and with the addition of the SeeWhy LLQP study tools the success rates climb to 95%+ on the first attempt. See page 11 in this document for sources of the SeeWhy LLQP Study tools.

If you are not sure about whether or not the LLQP is a course that you can manage, or if Life Insurance is a career option for you, then consider investing $80 in the SeeWhy Financial Learning LLQP STUDY GUIDE. See page 12. © 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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What Are The Costs Involved To Obtain My LLQP Life License? Continued …

How much will you invest in your future career? A career in Life Insurance and Financial Planning can be a very rewarding one that requires a “low cost of entry”. By that we mean that you do not require a formal education such as a college or university degree to qualify to study for your Life Insurance licence. A College or University education could cost at least $10,000 per year and a minimum of 3 years to obtain. For under $1000 you can start a life-long career as a Life Insurance Agent that you will be able to diversify with complimentary designations and industry memberships to increase your professional standing as the years progress. A career in the Financial Services industry can be very rewarding, financially and personally. Do your due diligence and invest wisely in your career choice. This includes the full LLQP course, including Accident and Sickness, your provincial or territory LLQP exam for your licence/certificate, and the extra study materials required (we highly recommend SeeWhy Financial Learning study tools and guides that are available through various providers - see page 11 of this document). Regardless of which LLQP course provider you select, or what province or territory you reside in, you need to make sure that you succeed, the first time, in your studies and your exams. To this end you need to purchase three (3) elements to successfully obtain your LLQP licence: 1. 2. 3.

LLQP Course from an approved provider; Study tools and study guides from a SeeWhy Learning course provider; The provincial/territory LLQP exam.

See page 13 for our recommended LLQP course providers Visit these documents to see what the LLQP course pass rates are for all the approved LLQP course providers: 1. British Columbia www.FSTCcanada.com/llqpbc.html 2. Alberta www.FSTCcanada.com/llqpab.html 3. Ontario www.FSTCcanada.com/llqpon.html 4. Canada composite www.FSTCcanada.com/llqpcanada.html See page 11 in this document for sources of the SeeWhy LLQP Study tools.

© 2010 Copyright FSTC Canada. Content providers for this document are protected by © Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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LLQP Exam Writing Tips

How is it that so many students pass the course provider's certification exam (which means they know their stuff) but still fail the actual licensing exam? Simply put, understanding the material alone is not sufficient to pass the LLQP licensing exam. To be successful, you need to use good exam writing techniques. Good exam writing techniques include: • • • • • • • • • •

Managing your time effectively Reading the question first Using T’s and F’s Recording your answer on the answer sheet after each question If you skip a question, take a guess on the answer sheet. Pretending you haven’t seen the scenario before Mastering the "art of guessing" Not second guessing yourself Don’t assume you are being tricked Write a paper-based exam

This package will help you master these skills. Read this carefully and give this to anybody else you know who may be taking the LLQP exam -- you could be the difference between them passing and failing their exam!

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Tip #1: Manage Your Time Effectively! The licensing exam is made up of 140 questions and to pass, you need to get 84 of them right. You simply cannot afford to run out of time and not finish the exam. In a stressful exam sitting, it is very easy to lose track of time. Countless students will hear the exam invigilator say, “You have 30 minutes left” only to realize they are only at question 70 (of 140). Do not let this happen to you. Create a road map! Consider the following example: Jake‟s LLQP exam started at 5:00 pm and ends at 9:00 pm. He knew he needed to answer 35 questions every hour so when his exam started he immediately "mapped out his exam". He has four hours so he broke his exam into quarters and wrote down what question he should be on when each hour passes. It looked like this: #35

6:00

#70

7:00

#105

8:00

#140

9:00

Then he broke it down even further into 1/2 hour segments: #18

5:30

#54

6:30

#88

7:30

#123

8:30

Jake started his exam. When he reached question 18 he saw "5:30". This reminded him to look at his watch to see if he was on track. He saw that he was behind because he was wasting too much time re-thinking a question after he already answered it. Jake knew early in his exam that he was behind and was able to get caught up.

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Tip #2: Read The Question First! (Our most important tip) The licensing exam questions are quite wordy and are often jam-packed with irrelevant information. If you read the scenario first, instead of the question, you will very likely run out of time on the exam. Consider the following sample LLQP question: Sam and Lisa have been married for ten years. Sam works as a self-employed architect earning $150,000 per year. Sam does not have any group insurance as he is self-employed. Lisa works as a teacher for the local school board. She earns $85,000 per year. Her group plan at work provides life insurance of 3X her annual salary. She also has a very competitive disability plan. Her group plan provides dental coverage with a $100 annual deductible and an 80% co- insurance factor on basic, major and orthodontic services subject to an annual maximum of $3,000 per covered individual. Sam and Lisa each have $85,000 in their RRSP plans. They plan to retire in 15 years and estimate that they will each need $1,000,000 in their RRSPs to do so comfortably. Sam and Lisa have two children. Frederick is their oldest and suffers from autism. His condition is quite severe and as a result, he lives in a facility that provides for his daily needs. The annual cost of the facility is $35,000. They are comfortable covering the costs of this facility from their current incomes but worry what would happen if they were to predecease Frederic. They estimate that Frederick will outlive them by 15 years. They are considering how much life insurance they would need to address this concern. After much discussion, they have agreed with you that a 5% investment return is a reasonable expectation. You have also discussed Sam‟s need for a disability policy. They ask you the difference between “own occupation”, “regular occupation” and “any occupation” as a definition of disability. How much insurance do they need to address their concerns about Frederick? $700,000 20-year term insurance $700,000 whole life insurance $525,000 20-year term insurance $525,000 whole life insurance

… Next page

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Strategy: Can you imagine if you started reading this scenario from the beginning? You may have made notes on things like their incomes, their RRSP balances, their group plans, etc. When you finally got to the question you would have thought, “Hmmm, that‟s what they are asking? Let me go back and read the scenario again”. This wastes time. Instead: Read the question first to see what they are actually looking for. Read the question again and be sure to take note of any key words like “except” “least” or "untrue". Look at the answers. Are they looking for you to recommend a product or are they requiring you to recommend the amount of insurance as well? Now that you know where you are going, read the scenario and make note of only the relevant information. Answer: This is a permanent need. Do they know when the need will go away? Do they know when they are going to die? Of course not, so this is a permanent need and a permanent policy is needed. 20-year term insurance is incorrect. If they die in 22 years, their insurance coverage would have expired. Whole life insurance is the answer. While the scenario says that they "estimate" their son will outlive them by 15 years, what if they are wrong? What if their son outlives them by more than 20 or 30 years? They need to replace the $35,000 income (to pay for the long term care facility) indefinitely. = Income required / investment return = $35,000 / 5% = $35,000 / 0.05 = $700,000 $700,000 invested at 5% will generate $35,000 each year, and it will never run out.

… Next page This page © Copyright 2010 SeeWhy Financial Learning www.SeeWhyLearning.com and www.LLQP.info. Publication Copyright FSTC Canada. All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


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Tip #3: Use “T’s” and “F’s” The LLQP exam has many questions where they are actually looking for a false answer. Examples are: • “All of the following are true, except...” • “Which of the following would you least recommend...” • “Which of the following is untrue...” Unfortunately, those key words are not bolded on the actual exam. Students that fail the LLQP exam often do so by just a few marks. Missing some of those key words can easily be the cause of the exam failure. Consider the following examples: Note: These questions have been shortened to illustrate the learning point and are not representative of the length of the actual LLQP exam questions Sample question: A client is weighing up all the pros and cons of investing in segregated funds. Segregated funds have many unique advantages. Which of the following is not one of those advantages? a. b. c. d.

Segregated funds offer certain guarantees at death or at maturity. Segregated funds are sold by several different mutual fund companies. Segregated funds offer creditor proofing. Segregated funds allow the opportunity to avoid probate fees at death.

Answer: The answer is B. However, in a stressful, fast paced exam session, countless students will look at the first answer and say to themselves “Cool, I got myself a mark because I know that “A” is a true statement”, but they missed the word “not” in the question. How frustrating it must be to have lost a mark when they actually knew the concept.

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The following strategy will ensure that you don‟t make even one of these errors, which can make the difference between a pass and a fail. Put a “T” for true or “F” for false beside every single answer. Only after doing this will you select your answer. For example: Let’s try it again. A client is weighing up all the pros and cons of investing in segregated funds. Segregated funds have many unique advantages. Which of the following is not one of those advantages? a. b. c. d.

Segregated funds offer certain guarantees at death or at maturity. Segregated funds are sold by several different mutual fund companies. Segregated funds offer creditor proofing. Segregated funds allow the opportunity to avoid probate fees at death.

T F T T

Explanation: You can now see that three answers are true and one is false. This will prompt you to think, “Hmmm, how can there be three “correct” answers? Maybe they are looking for the incorrect answer.” Now go back to the question, and you will notice the word “not”. Segregated funds are insurance products and as such are sold by insurance companies. They are not sold by mutual fund companies.

… Next page

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Sample question: In the 2007 budget, the government made some enhancements to the RESP program. All but which of the following is one of those enhancements? a. b. c. d.

The maximum grant was increased from $400 to $500. The lifetime contribution limit per child was increased to $50,000. RESP contributions are now deductible for tax purposes. There is now no annual contribution limit.

T T F T

Explanation: By using your “T‟s” and F‟s” you will notice that there are three true answers and one false answer, another question where they are looking for the “incorrect” answer!!!

Sample question: Steven has $100,000 to invest for 3 months as he is buying a home near the end of the year. Mutual funds: a. b. c. d.

are not suitable as short term investments are excellent short term investments are sold by insurance companies are not suitable as short term investments with the exception of money market funds

T F F T

Explanation: We have introduced a new type of question here. In this question, they are looking for the “best” answer. They are trying to trick you. How many students will look at answer “A”, say "That‟s true", select it, and then move on to the next question without looking at the other options? “A” may be true but “D” is more true. By using your “T‟s” and "F‟s” you will see that there are two potentially “correct” answers. You can now go back to the question and consider which is the best answer.

… Next page

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Tip #4: Record Your Answer After Each Question You will be given a question booklet and an answer sheet (a bubble sheet). After each question, record your answer on the bubble sheet. Consider the following scenario: Karim was really nervous about time on the licensing exam. He decided he was going to complete the exam first and then, as a final step, record all of his answers on the bubble sheet. Karim lost track of time and was surprised when he heard the exam invigilator advise the class that they had "2 minutes remaining". Karim frantically started recording his answers. By the invigilator took his exam paper from him, he had only recorded 35 answers. Needless to say, Karim failed the exam. Don‟t let this happen to you. Record each answer after you have completed the question!

Tip #5: If You Skip A Question, Take A Guess On The Answer Sheet. Answer each question in chronological order. If you don‟t know an answer, guess and move on, but be sure to fill in an answer on the bubble sheet and make a mark on your exam booklet to remind you to go back and try it again should you have time remaining. Consider the following scenario: Sandra was very prepared for her LLQP exam but she hit question #30 and was stumped. She decided to skip it and move on to question #31 without taking a guess on the bubble sheet. She then accidentally recorded the answer to question #31 on the bubble sheet in the spot where #30 should be answered, then #32 in the #31's spot, etc. When she finally got to question #140, she realized her mistake. She didn't have time to go back and figure out where her answers go misaligned. Even though she knew her stuff, she failed her exam. Don’t let this happen to you. By skipping questions, you run the risk of misaligning your answers.

… Next page

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Tip #6: Pretend You Have Not Seen The Scenario Before On the licensing exam they will re-use scenarios. Sometimes, the scenario is exactly the same. Sometimes it's a tiny bit different. How will you know? Perhaps they made one small change such as “par policy” becoming a “non par policy”. Do not try to find the subtle differences that may or may not be there. Instead, pretend you have not seen the scenario before and use the tips discussed above -- read the question first and look at the possible answers. Now read the scenario (pretending you have not seen it before) and make note of relevant information.

Tip #7: The Art Of Guessing There is an art to guessing. Even if you have no idea what the answer is, do not write the question off as it may be the difference between passing and failing. Logically try to eliminate a couple wrong answers to at least give yourself a 50/50 chance. If you have no idea at all, “D” is statistically correct more often than A, B, or C. This is because they will often use the first choices to try to trick you. If you have no idea, be wary of really "long-winded" answers. It's true what your mother told you: “It takes more words to tell a lie than to tell the truth”.

Tip #8: Don’t Second Guess Yourself! Only change an answer if you are sure as your first impulse is usually right. You probably heard the saying “your gut never lies”. Only change an answer if you are absolutely sure you made a mistake. More often than not, when a student changes an answer they end up changing it from the right one to the wrong one. If you notice that you have a bunch of “C‟s” or “D‟s” in a row, don‟t second guess yourself. This is typical of the licensing exam.

… Next page

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Tip #9: Don’t Always Assume You Are Being Tricked! This is easier said than done, but it is very important. While you have to read the questions, the answers and the scenarios very carefully, don‟t always assume you are being tricked. Sometimes you will be given a “gift” question, and you know the old saying ”Don‟t look a gift horse in the mouth.” In other words, take the mark and run! For example, you may be given a long scenario followed by a question like, “What is the RRSP contribution limit for Canadians in 2008?” Don‟t over-think this! The answer is $20,000, no matter how much irrelevant information they put in the scenario! Don‟t stare at the question thinking, “It can‟t be this easy – there has to be a trick here!” If you can‟t find a trick, answer the question to the best of your ability and move on to the next one.

Tip #10: Write A Paper-Based Exam According the Regulator‟s own website, the pass rate on paper-based exams is often higher than computer-based exams. This makes sense because on a paper-based exam, you can use many of the strategies we discussed above, like mapping out your exam, using your “Ts & Fs”, etc. If you have the choice, we strongly suggest you write a paper-based exam.

This page © Copyright 2010 SeeWhy Financial Learning www.SeeWhyLearning.com and www.LLQP.info. Publication Copyright FSTC Canada. All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


28

Š 2010 Copyright FSTC Canada. Content providers for this document are protected by Š Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


29

Š 2010 Copyright FSTC Canada. Content providers for this document are protected by Š Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


30

Download your Free copy of the SeeWhy Information Brochure on the LLQP www.LLQP.info/SeeWhy_LLQP_Study_Materials.pdf

Š 2010 Copyright FSTC Canada. Content providers for this document are protected by Š Copyright for their works and are indicated on each respective page in this document. SeeWhy Financial Learning, The Insurance Advisor Training Centre, Financial Services Training Courses Canada, Wikipedia and CC-BY-SA . All rights reserved. Copying in whole or in part without written permission of the Copyright holder is not permitted. This document may be freely distributed as-is without modifications.


The LLQP Code