LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client wants to name her spouse as annuitant on a non-registered seg fund contract she owns. The agent should explain:
- AIt voids the guarantee, since the guarantees are priced on the owner's life and cannot be transferred
- BIt is prohibited, since the annuitant of a non-registered contract must always be the owner
- It is permitted; the death benefit is then triggered by the spouse's death, so ownership and beneficiary must be coordinated
- DIt makes the spouse the owner of the contract, with full control over withdrawals and beneficiaries
Correct answer: C) It is permitted; the death benefit is then triggered by the spouse's death, so ownership and beneficiary must be coordinated
Owner, annuitant and beneficiary roles can be split. The consequences for who receives what, and when, must be explained.
Why the other options are wrong
- AGuarantees continue regardless of who is named annuitant.
- BNaming a spouse as annuitant on a non-registered contract is permitted.
- DOwnership is separate from the annuitant designation.
Exam tip
Owner ≠ annuitant possible; death benefit follows the annuitant's death.
Common mistake
Naming a younger annuitant without explaining the death benefit timing.
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.