LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
An impaired annuity application additionally requires:
- AA paramedical examination of the beneficiary, since the enhanced rate depends on the beneficiary's life expectancy
- Medical evidence of the condition, so the insurer can assess reduced life expectancy and offer enhanced rates
- CProof of the annuitant's income, since impaired rates are available only to clients below a stated income
- DNothing beyond the standard application, since the insurer assumes impairment from the annuitant's age
Correct answer: B) Medical evidence of the condition, so the insurer can assess reduced life expectancy and offer enhanced rates
Impaired annuities are underwritten in reverse: worse health means better rates, and evidence is required.
Why the other options are wrong
- AThe annuitant's health matters, not the beneficiary's.
- CIncome is irrelevant to impaired annuity rates.
- DMedical evidence is required.
Exam tip
Impaired annuity: medical evidence of the annuitant's condition.
Common mistake
Applying for standard rates when impaired rates were available.
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.