LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
A client's need to provide for a disabled adult child after death is addressed by:
- ACashing out registered plans now and gifting the proceeds to the child while the client is alive
- An RDSP, a Henson-type trust, registered plan rollover, and insurance to fund the trust
- CNothing special, since provincial disability programs will support the child after the parent's death
- DNaming the child directly as beneficiary of every plan, so the inheritance arrives without delay or legal cost
Correct answer: B) An RDSP, a Henson-type trust, registered plan rollover, and insurance to fund the trust
Direct inheritance may disqualify the child from means-tested benefits. Specialized structures preserve them. Registered plan rollovers to dependent disabled children are available.
Why the other options are wrong
- ACashing out triggers tax and a direct gift can end provincial benefits.
- CProviding for a disabled child is a serious need with specialized solutions.
- DDirect inheritance can disqualify the child from provincial benefits.
Exam tip
Disabled child: RDSP, discretionary trust, registered plan rollover, insurance.
Common mistake
Naming a benefits-dependent disabled child as direct beneficiary.
What this tests
CISRO competency component 1.3 — 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.