LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client aged fifty plans to retire at sixty-five and will draw on the deposit then. The maturity date of the guarantee should be set:
- at a date no later than when the money will be needed, so the guarantee is useful
- Bas early as the contract permits, so that the guarantee is tested as soon as possible
- Cat a date chosen by the insurer, since contract holders cannot influence this term
- Dat the latest date available, because a longer guarantee period always costs less overall
Correct answer: A) at a date no later than when the money will be needed, so the guarantee is useful
A guarantee that matures after the client needs the money offers nothing when it matters. Aligning the maturity date with the planned withdrawal, and checking the effect of any reset, is central to a suitable recommendation.
Why the other options are wrong
- BAn unnecessarily early maturity may force a decision before the client is ready.
- CThe contract holder selects from the maturity options the insurer offers.
- DA later maturity does not reduce cost and may push the guarantee beyond the need.
Exam tip
Line the guarantee's maturity date up with the date the client needs the money.
Common mistake
Accepting a default maturity date without checking it against the client's timeline.
What this tests
CISRO competency component 3.1 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 3
- A client's spouse must sign for:
- When the insurer requests additional information after the application (for example, source of wealth for a large deposit), the agent should:
- The implementation of a recommendation involving a switch from one seg fund to another within a contract requires:
- A client wishes to designate a charity as beneficiary of a segregated fund. Implementation should:
- For a deferred annuity implemented for a client, the agent should confirm:
- The agent's record of the implementation should be retained:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.