LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client's segregated fund contract is approaching its maturity date. The insurer will:
- ADo nothing until the client contacts the insurer, since maturity is an event the client is expected to track
- BCancel the contract and pay out the market value, since the guarantee period has come to an end
- Notify the client of the options to take cash, renew or annuitize, with a default if no election is made
- DAutomatically cash out the contract at the guaranteed amount and close the client's account
Correct answer: C) Notify the client of the options to take cash, renew or annuitize, with a default if no election is made
Maturity is a decision point. The agent should contact the client before the deadline to make an informed election.
Why the other options are wrong
- AInsurers give advance notice of maturity.
- BThe contract matures; it is not cancelled.
- DCash is one option; the default is often renewal or annuitization.
Exam tip
Maturity: cash, renew, or annuitize; act before the default applies.
Common mistake
Letting the default election happen without client input.
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 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:
- A client is considering replacing her existing segregated fund contract with one from another insurer. Before any replacement the agent must:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.