LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client wants to name her estate as beneficiary 'for simplicity'. At implementation the agent should:
- AComply without comment, since the estate is a valid beneficiary and the choice is the client's to make
- Explain the loss of probate bypass and creditor protection, offer alternatives, and document her decision
- CRefuse to submit the application until she names an individual, since naming the estate wastes the product's most valuable feature
- DName her spouse instead, since that is what most clients in her position would have chosen
Correct answer: B) Explain the loss of probate bypass and creditor protection, offer alternatives, and document her decision
The client's choice governs after informed advice; the reasons must be documented.
Why the other options are wrong
- AThe agent must advise on the consequences before complying.
- CThe client may choose the estate after being advised.
- DThe designation must reflect the client's instruction.
Exam tip
Estate designation: advise, offer alternatives, document.
Common mistake
Not documenting advice that the client declined.
What this tests
CISRO competency component 3.2 — 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.