LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client's recommendation includes a segregated fund with a 100% death guarantee at 78. The agent should verify:
- ANothing further, since a death guarantee is available to every annuitant regardless of age
- That the insurer issues that level at her age, whether it reduces for later ages or deposits, and the fee
- CThe fund's past returns, since a strong track record reduces the chance the guarantee will ever be needed
- DOnly the fee, since the guarantee level itself is standard across insurers for annuitants of her age
Correct answer: B) That the insurer issues that level at her age, whether it reduces for later ages or deposits, and the fee
Age-related restrictions on death guarantees are common and vary by insurer. The recommendation must be issuable.
Why the other options are wrong
- AAvailability at 78 is uncertain.
- CReturns do not affect availability.
- DAvailability must be verified before the fee matters.
Exam tip
Verify guarantee availability at the client's age before recommending.
Common mistake
Promising 100% death guarantee that the contract caps at 75% for her age.
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.