LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
A beneficiary designation is disputed because two forms with different beneficiaries exist. The insurer will typically:
- Pay according to the latest valid designation on file, or pay the proceeds into court if unclear
- BSplit the proceeds equally between the two named beneficiaries, since both forms were signed by the owner
- CKeep the money in the general account until the beneficiaries reach a settlement between themselves, however long that takes
- DPay whichever beneficiary files a claim first, since the insurer cannot judge between two valid forms
Correct answer: A) Pay according to the latest valid designation on file, or pay the proceeds into court if unclear
Insurers rely on their records; disputes go to court. Good record-keeping by the agent helps.
Why the other options are wrong
- BProceeds are not split unless the designation says so.
- CThe insurer pays out; it does not retain the proceeds.
- DThe latest valid designation governs, not the order of claims.
Exam tip
Disputed designation: latest valid form, or payment into court.
Common mistake
Not submitting a beneficiary change to the insurer, leaving an old designation in force.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 4
- A client's daughter was born last month and the client wants her added to the segregated fund designation. The agent should:
- A client wants to withdraw part of his segregated fund before maturity. The agent should explain:
- A client's segregated fund contract is approaching its maturity date. The insurer will:
- A client asks to add her adult son as a joint owner of her non-registered segregated fund contract. The agent should explain that:
- A client wants to replace the beneficiary on a contract where the current designation was made irrevocable. The agent must explain that:
- A client who has lost her job asks to pause her pre-authorized monthly contributions for six months. The agent should:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.