LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client in a second marriage wants his current spouse supported for life but the capital to reach the children of his first marriage. The agent should:
- raise settlement options or a trust structure and recommend legal advice on the arrangement
- Bname the children as sole beneficiaries, leaving the spouse to rely on her own resources
- Cadvise that this outcome is impossible, so the client must choose one side or the other
- Dname the current spouse as sole beneficiary and trust her to pass the capital on later
Correct answer: A) raise settlement options or a trust structure and recommend legal advice on the arrangement
Blended family objectives usually need a structure rather than a simple designation. Settlement options, a life interest or a trust can support the spouse while preserving the capital, and the drafting belongs with a lawyer.
Why the other options are wrong
- BNaming only the children ignores the support the client wants his spouse to have.
- CThe outcome is achievable through recognized planning structures.
- DRelying on goodwill after death leaves the children with no protection at all.
Exam tip
Blended family objectives equal a structure plus a legal referral, not a simple designation.
Common mistake
Solving a blended family need with a single beneficiary designation.
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.