LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client who has lost her job asks to pause her pre-authorized monthly contributions for six months. The agent should:
- arrange the suspension and agree a date to review restarting the contributions with her
- Bincrease the contribution amount instead so that the plan stays on track during the interruption
- Cleave the contributions running, since stopping them would cancel the contract guarantees
- Dtell her the contract must be surrendered, since contributions cannot be interrupted once started
Correct answer: A) arrange the suspension and agree a date to review restarting the contributions with her
Suspending contributions keeps the contract and its guarantees intact while relieving the immediate pressure. Setting a review date makes it more likely the client resumes saving rather than letting the plan lapse indefinitely.
Why the other options are wrong
- BRaising the amount is the opposite of what a client without income can manage.
- CGuarantees relate to deposits already made and are not cancelled by a pause.
- DA pause in contributions does not require the contract to be surrendered.
Exam tip
Pause contributions rather than surrender the contract when income stops temporarily.
Common mistake
Letting a client surrender a contract when a suspension would have preserved it.
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's segregated fund contract is approaching its maturity date. The insurer will:
- 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 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
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