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IFSE Institute LLQP Exam - Topic 4 Question 26 Discussion

Nelson is turning 46 and wants to explore additional tax planning opportunity. He is an avid investor and has invested into a lot of mutual funds and stocks. His RRSP is currently maxed out. He is meeting with Andrew, his financial advisor with life insurance license, to discuss on his financial future and some life insurance policy options. As a risk taker, Nelson would like tohave a plan that would allow him to supplement his retirement income when he reaches 70. However, his employment income is very high and his marginal tax rate will remain at the top bracket even after his retirement.What recommendation should Andrew make in order to fit Nelson's need?
B) Purchase a universal life insurance and leverage the cash value with a collateral loan.
A) Purchase a universal life insurance and access its cash value with a policy loan.
C) Purchase a whole life insurance and access its cash value by policy loan.
D) Purchase a whole life insurance and leverage the cash value with a collateral loan.

IFSE Institute LLQP Exam - Topic 4 Question 26 Discussion

Actual exam question for IFSE Institute's LLQP exam
Question #: 26
Topic #: 4
[All LLQP Questions]

Nelson is turning 46 and wants to explore additional tax planning opportunity. He is an avid investor and has invested into a lot of mutual funds and stocks. His RRSP is currently maxed out. He is meeting with Andrew, his financial advisor with life insurance license, to discuss on his financial future and some life insurance policy options. As a risk taker, Nelson would like tohave a plan that would allow him to supplement his retirement income when he reaches 70. However, his employment income is very high and his marginal tax rate will remain at the top bracket even after his retirement.

What recommendation should Andrew make in order to fit Nelson's need?

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Suggested Answer: B

by Pearline at Apr 03, 2026, 12:32 PM

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Brittani
3 days ago
B seems like a smart move with collateral loans!
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Tony
8 days ago
Wait, can you really rely on life insurance for retirement income?
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Leila
2 months ago
Definitely agree, universal life is flexible!
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Emerson
2 months ago
I think option A sounds solid for accessing cash value.
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Major
3 months ago
I practiced a similar question before, and I think universal life might be the way to go for Nelson. The flexibility in accessing cash value seems crucial for his retirement strategy.
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Linn
3 months ago
I’m a bit confused about the differences between whole life and universal life in this context. I feel like both could work, but I can't recall which one is more beneficial for tax planning.
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Darci
3 months ago
I think leveraging the cash value with a collateral loan could be a smart move, especially since Nelson has a high income. It might help him manage taxes better in retirement.
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Sommer
3 months ago
I remember discussing the benefits of universal life insurance in class, especially how it can provide flexibility with cash value access. But I'm not sure if a policy loan is the best option for Nelson.
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