LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client's contract is being merged or the fund closed by the insurer. The client's rights include:
- ADouble the guarantee on the affected deposits, as compensation for the change imposed by the insurer
- BA refund of all fees paid on the closed fund since the original deposit date
- CNone, since the insurer may reorganize its fund line-up at any time under the terms of the contract without consulting clients
- Advance notice and the right to switch or withdraw without sales charges, with guarantees preserved on a switch
Correct answer: D) Advance notice and the right to switch or withdraw without sales charges, with guarantees preserved on a switch
Fund closures are fundamental changes. The agent should help the client choose a replacement fund.
Why the other options are wrong
- AA fund closure does not double the guarantee.
- BFees are not refunded.
- CClients have defined rights when a fund is closed or merged.
Exam tip
Fund closure: notice, free switch/withdrawal, guarantees preserved.
Common mistake
Letting the insurer's default fund selection apply without review.
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.