LLQP Segregated Funds & Annuities · Component 2.2 · 30% of the exam
A widow asks how she will receive the death benefit from her late husband's segregated fund. It is paid:
- Directly by the insurer on proof of death, usually within weeks, without waiting for probate
- BThrough the executor, who receives the proceeds and distributes them under the will
- CAfter probate is granted, since the insurer needs the court's confirmation of the beneficiary
- DOnly after one year, which is the statutory waiting period for insurance death claims
Correct answer: A) Directly by the insurer on proof of death, usually within weeks, without waiting for probate
Speed and privacy of payment are practical advantages over estate assets, which can be frozen for months.
Why the other options are wrong
- BIt is paid directly to the beneficiary, not the executor.
- CA named beneficiary receives the benefit without waiting for probate.
- DPayment follows proof of death promptly.
Exam tip
Death benefit: direct, prompt, private.
Common mistake
Failing to mention the liquidity advantage for the estate.
What this tests
CISRO competency component 2.2 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
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