LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client wants to split the death benefit among three children in unequal shares. At implementation the agent must ensure that:
- Athe largest share is allocated to the eldest child in accordance with standard practice
- the shares are stated clearly and add up to the whole benefit, leaving nothing unallocated
- Ceach beneficiary receives an equal share, since insurers cannot administer unequal splits
- Dthe children sign the designation to confirm that they accept the shares allocated to them
Correct answer: B) the shares are stated clearly and add up to the whole benefit, leaving nothing unallocated
Percentages that do not total the whole leave part of the benefit undirected and may send it to the estate. The agent should confirm the arithmetic, use whole percentages and check what happens if a beneficiary dies first.
Why the other options are wrong
- AThere is no rule preferring an older child in a designation.
- CUnequal shares are perfectly acceptable and commonly used.
- DBeneficiaries do not sign a designation and need not know of it.
Exam tip
Check that beneficiary percentages total the whole benefit before submitting.
Common mistake
Submitting a designation whose percentages do not add up.
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.