LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client asks to exercise a reset on her contract. The agent should:
- Confirm market value exceeds the guarantee, explain the new maturity date and limits, and record her instruction
- BReset the beneficiary designation at the same time, since a reset reopens every term of the contract
- CDecline the request, since resets are exercised only by the insurer under the automatic reset feature and never by the client
- DProcess the reset without discussion, since the client has asked for it and the effect is always favourable
Correct answer: A) Confirm market value exceeds the guarantee, explain the new maturity date and limits, and record her instruction
Resets are client-elected amendments (unless automatic) with a maturity consequence.
Why the other options are wrong
- BA reset has nothing to do with the beneficiary designation.
- CResets are the client's right within contract limits.
- DThe maturity extension must be explained before a reset.
Exam tip
Reset: confirm value, explain new maturity, document.
Common mistake
Resetting when market value is below the guarantee (no benefit).
What this tests
CISRO competency component 4.1 — 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.