LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
A couple want to ensure the survivor's income does not fall sharply at the first death. The need points toward:
- ASingle-life annuities on each spouse, maximizing the income received while both of them are alive
- BNaming the children as beneficiaries, so the estate passes directly at the first death
- CHolding all investments in the older spouse's name, so the income is taxed at the lower rate
- Joint and survivor arrangements and successor designations that keep income flowing to the survivor
Correct answer: D) Joint and survivor arrangements and successor designations that keep income flowing to the survivor
A survivor typically keeps most of the household's fixed costs, so continuity of income and tax-deferred continuation of registered plans matter more than maximizing the joint-life amount.
Why the other options are wrong
- ASingle-life income stops at the first death, which is the risk being addressed.
- BNaming the children bypasses the survivor who needs the money.
- CConcentrating assets in one name does not protect the survivor's income.
Exam tip
Protect the survivor before maximizing the joint income.
Common mistake
Buying single-life income for a married client without discussing the survivor.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.