LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A power of attorney signing a segregated fund application on behalf of an incapable client:
- AIs always acceptable, since a valid power of attorney gives the attorney every right the client has over the contract
- BCannot invest on the client's behalf, since a power of attorney is limited to paying the grantor's bills
- Must provide the POA for the insurer's review; attorneys generally cannot designate beneficiaries
- DCan change the beneficiary freely, since the attorney steps into the grantor's shoes for every decision
Correct answer: C) Must provide the POA for the insurer's review; attorneys generally cannot designate beneficiaries
POA limits on beneficiary designations are important. The agent should verify the document and the attorney's authority.
Why the other options are wrong
- AThe scope of the POA must be verified.
- BInvesting is usually within scope.
- DBeneficiary designation is generally beyond an attorney's power.
Exam tip
POA: verify document; no beneficiary changes; suitability for the grantor.
Common mistake
Accepting a beneficiary change from an attorney under POA.
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.