LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client is 71 this year and holds an RRSP. The situation analysis must note that:
- AShe must move the RRSP into a segregated fund, since only insurance contracts can hold matured plans
- BNothing changes at 71, since RRSPs mature only when the annuitant chooses to retire
- CShe can keep contributing as long as she has earned income, since the plan never has to mature
- The RRSP must become a RRIF, an annuity or cash by the end of this year
Correct answer: D) The RRSP must become a RRIF, an annuity or cash by the end of this year
RRSP maturity at 71 is a key life-cycle fact. The options — RRIF, annuity, lump sum — are the core of the module's retirement income discussion.
Why the other options are wrong
- ASegregated funds are one option for RRIF money, not a requirement.
- BThe RRSP must mature by the end of the year the annuitant turns 71.
- CContributions end with maturity, apart from spousal RRSP exceptions.
Exam tip
RRSP matures by end of the year the annuitant turns 71: RRIF, annuity or cash.
Common mistake
Missing the maturity deadline.
What this tests
CISRO competency component 1.1 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.