LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
A client dies holding a segregated fund with no beneficiary named and no will. The proceeds will:
- Abe shared equally among all living relatives on production of proof of their relationship
- Bbe paid to whichever family member first submits a completed claim form to the insurer
- fall into the estate and be distributed under the provincial intestacy rules after probate
- Dbe paid to the insurer's chosen charity, since no recipient can be identified from the contract
Correct answer: C) fall into the estate and be distributed under the provincial intestacy rules after probate
With no designation the contract forms part of the estate, so probate fees, creditor claims and delay all apply. Because there is no will, the provincial intestacy rules determine who eventually receives the money.
Why the other options are wrong
- ADistribution follows the intestacy rules, not an equal split among all relatives.
- BBeing first to file gives no entitlement to estate proceeds.
- DAn insurer does not select a recipient when no beneficiary is named.
Exam tip
No designation equals estate, probate and, without a will, the intestacy rules.
Common mistake
Assuming family members can claim directly when no beneficiary was named.
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.