LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client wishes to designate a charity as beneficiary of a segregated fund. Implementation should:
- Record the charity's legal name and registration number, note the designation is revocable, and mention the donation credit
- BName the estate and instruct the executor to donate, since a charity cannot be a beneficiary of an insurance contract under provincial law
- CDecline the designation, since only individuals may be named as beneficiaries of a segregated fund
- DName the agent as beneficiary in trust for the charity, so the agent can direct the proceeds at death
Correct answer: A) Record the charity's legal name and registration number, note the designation is revocable, and mention the donation credit
Charitable designations are permitted; precision in naming prevents disputes. The estate may claim a donation credit for designated proceeds.
Why the other options are wrong
- BNaming the estate loses the direct designation.
- CCharities can be named as beneficiaries.
- DNaming the agent as beneficiary is misconduct.
Exam tip
Charity beneficiary: exact name, registration number, tax credit note.
Common mistake
Naming a charity by an informal name.
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:
- For a deferred annuity implemented for a client, the agent should confirm:
- The agent's record of the implementation should be retained:
- Implementation is complete when:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.