LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client's recommendation for a deposit into a segregated fund with a cancer diagnosis in progress should consider:
- AThat a medical examination is required, since the death guarantee is a form of life insurance
- BThat she is uninsurable for segregated funds, since a serious illness disqualifies any contract that carries a death benefit
- Segregated funds need no medical underwriting, so the death guarantee is available; impaired annuity rates may apply
- DNothing in particular, since health has no bearing on any investment product the agent can recommend
Correct answer: C) Segregated funds need no medical underwriting, so the death guarantee is available; impaired annuity rates may apply
No underwriting is a distinctive seg fund feature valuable to clients in poor health, subject to age limits. Insurers manage the risk through guarantee terms.
Why the other options are wrong
- ANo medical examination is required for a segregated fund.
- BNo underwriting applies.
- DHealth affects product choice, especially annuities.
Exam tip
Seg funds: no medical underwriting; death guarantee available regardless of health.
Common mistake
Assuming poor health blocks seg fund purchase.
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.