LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
A family discovers a segregated fund contract a year after the annuitant died and asks whether it is too late to claim. The agent should explain that:
- Athe benefit is forfeited because claims must be submitted within ninety days of a death
- the claim can still be made, and the benefit is generally calculated as at the date of death
- Cthe benefit is reduced by one tenth for every month of delay in submitting the claim
- Dthe proceeds have already been paid to the government as unclaimed property and are gone
Correct answer: B) the claim can still be made, and the benefit is generally calculated as at the date of death
A delay in notification does not extinguish the beneficiary's entitlement. The insurer values the death benefit and applies the guarantee as at the date of death, so the agent should help the family gather the required documents.
Why the other options are wrong
- AThere is no short deadline that forfeits a properly designated death benefit.
- CBenefits are not reduced according to how long the family took to claim.
- DUnclaimed property procedures arise only after very long periods and recovery remains possible.
Exam tip
Late notification does not forfeit a death benefit; the valuation date is the death.
Common mistake
Telling a family that a delayed claim has been lost.
What this tests
CISRO competency component 4.2 — 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 who has lost her job asks to pause her pre-authorized monthly contributions for six months. The agent should:
Practice the whole Segregated Funds & Annuities module
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