LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client's recommendation involves naming her adult child as beneficiary of a non-registered seg fund while her will leaves everything to her spouse. The agent should:
- ARefuse to take the designation, since a beneficiary that conflicts with the will cannot be accepted by the insurer
- Point out the inconsistency, explain the designation overrides the will, and suggest her lawyer
- CProceed without comment, since the designation is the client's decision and the will is outside the agent's scope
- DChange the will to match the designation, since the agent is best placed to keep the two documents consistent with each other
Correct answer: B) Point out the inconsistency, explain the designation overrides the will, and suggest her lawyer
Designations and wills must be coordinated. Agents cannot draft wills but must flag conflicts.
Why the other options are wrong
- AThe client may have reasons; the agent informs and documents.
- CThe conflict is material and must be raised.
- DAgents do not change wills.
Exam tip
Flag designation/will inconsistencies; refer to legal advice.
Common mistake
Ignoring the will when taking a beneficiary designation.
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.