LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client asks whether the maturity date on her segregated fund contract can be brought forward by five years. The agent should explain that:
- Aany change to the maturity date cancels the death benefit guarantee on the contract
- Bthe maturity date may be changed freely at any time on the client's written instruction
- the date is fixed by the contract terms and generally cannot simply be moved earlier
- Dthe date moves earlier automatically whenever the market value exceeds the guaranteed amount
Correct answer: C) the date is fixed by the contract terms and generally cannot simply be moved earlier
The maturity date is a term of the contract, and the insurer priced the guarantee around it. Resets typically push the date later rather than earlier, so a client needing money sooner must plan around a withdrawal instead.
Why the other options are wrong
- AThe death benefit guarantee is not cancelled by a change of maturity date.
- BContract terms are not adjustable on a simple instruction from the holder.
- DMarket value does not move the maturity date under the contract.
Exam tip
Maturity dates move later through resets, not earlier on request.
Common mistake
Promising a client that the maturity date can be pulled forward when needed.
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
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