LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client asks whether the insurer can change the fees on her segregated fund. The agent should explain:
- AOnly with her written consent, since a fee change is an amendment to the contract she signed
- BNever, since the fees disclosed in the information folder are guaranteed for the life of the contract by provincial regulation
- The contract usually allows changes within limits or with notice, and fundamental changes give exit rights
- DFees are fixed by provincial law, so no insurer can change them once a contract has been issued
Correct answer: C) The contract usually allows changes within limits or with notice, and fundamental changes give exit rights
'Fundamental change' provisions give clients exit rights when insurers change key terms, fees or funds.
Why the other options are wrong
- AConsent is not required; notice and exit rights apply.
- BChanges are possible with notice.
- DSegregated fund fees are not fixed by law.
Exam tip
Fundamental changes: notice + right to switch/withdraw without charges.
Common mistake
Telling a client fees can never change.
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.