LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
An annuitant and the sole named beneficiary die in the same accident and the order of death cannot be established. The proceeds will generally:
- Abe held by the insurer indefinitely until a court finally determines the order of the deaths
- pass to the contingent beneficiary if one was named, and otherwise to the annuitant's estate
- Cbe paid to the insurer's default recipient list, starting with the nearest surviving relative
- Dbe divided equally between the two estates in order to treat both families fairly
Correct answer: B) pass to the contingent beneficiary if one was named, and otherwise to the annuitant's estate
Survivorship legislation generally treats the beneficiary as having died first where the order cannot be determined. A contingent designation then takes effect, and without one the proceeds fall into the annuitant's estate.
Why the other options are wrong
- AThe legislation resolves the question, so an indefinite hold is unnecessary.
- CInsurers do not maintain a default list of relatives to pay.
- DThe proceeds are not split between estates on an unresolved order of death.
Exam tip
Simultaneous death is the strongest argument for naming a contingent beneficiary.
Common mistake
Assuming a sole beneficiary's estate receives the proceeds after a common accident.
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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