LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A recommendation for a young couple saving for a first home in five years should:
- AUse an aggressive equity segregated fund with a 15-year guarantee, since the guarantee protects the down payment
- BUse a deferred annuity that begins payments in five years, so the income can service the new mortgage
- Consider the FHSA and TFSA with a conservative-to-balanced mix, avoiding lock-ins that conflict with the date
- DSet registered options aside, since first-home savings are best kept in an ordinary non-registered account
Correct answer: C) Consider the FHSA and TFSA with a conservative-to-balanced mix, avoiding lock-ins that conflict with the date
Plan type and horizon drive the recommendation. The FHSA offers deduction and tax-free withdrawal for a first home; the HBP is another route.
Why the other options are wrong
- AHorizon mismatch and excess risk.
- BAnnuities are income products, not savings vehicles.
- DRegistered options are tax-advantaged for this goal.
Exam tip
First home: FHSA/TFSA/HBP, horizon-matched mix, no lock-ins.
Common mistake
Locking home savings into a long guarantee.
What this tests
CISRO competency component 3.1 — 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
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