LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
An annuitant asks to change the payment frequency of an annuity in payment. The agent should explain:
- AAny change is allowed, since an annuity is the annuitant's property and the insurer must follow instructions
- BThe annuity can be cashed and repurchased on new terms at any time, since the commuted value is always available on request
- Annuities in payment are largely irrevocable; some insurers permit administrative changes but not amount, term or annuitant
- DThe insurer must double the payments for the balance of the term if the annuitant asks for a shorter period
Correct answer: C) Annuities in payment are largely irrevocable; some insurers permit administrative changes but not amount, term or annuitant
An annuity in payment is irrevocable, so amendments are limited to administrative matters such as payment frequency or banking details; the amount, term, guarantee and annuitant cannot change.
Why the other options are wrong
- ASubstantive terms are fixed once payments begin.
- BAn annuity in payment cannot be cashed.
- DThe insurer has no obligation to change the payment amount.
Exam tip
Annuity in payment: administrative changes only.
Common mistake
Promising an annuitant they can change the term later.
What this tests
CISRO competency component 4.1 — 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
Timed sets weighted like the exam, and review of every question you miss. Free to start.