LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
An agent receives a client's issued contract from the insurer and sets it aside for a few weeks. The main problem with this delay is that:
- Athe insurer will cancel the guarantees on any contract not delivered within two weeks
- Bthe deposit earns no return until the contract has been physically handed to the client
- the rescission period is tied to delivery, so the client's right is postponed unfairly
- Dthe contract becomes void if it is not delivered within thirty days of being issued
Correct answer: C) the rescission period is tied to delivery, so the client's right is postponed unfairly
Prompt delivery starts the rescission period and gives the client the chance to review the contract while the discussion is fresh. Delay also postpones the review of guarantees, fees and beneficiary details with the client.
Why the other options are wrong
- AGuarantees are not cancelled by a delay in delivering the contract.
- BThe deposit is invested and earning from the effective date of the transaction.
- DA contract is not voided merely because delivery was slow.
Exam tip
Delivery starts the rescission clock, so it must happen promptly.
Common mistake
Treating contract delivery as an administrative step with no time sensitivity.
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.