LLQP Segregated Funds & Annuities · Component 2.3 · 30% of the exam
'Annuity certain to age 90' is relevant because:
- A permitted RRSP maturity option: a term-certain annuity to age 90, with the balance to the beneficiary
- BThe only RRSP maturity option that pension legislation permits for locked-in funds transferred from a pension plan
- CIt is prohibited for registered funds, since the term could end before the annuitant's death
- DIt pays for life, with the age 90 reference setting only the guaranteed minimum term
Correct answer: A) A permitted RRSP maturity option: a term-certain annuity to age 90, with the balance to the beneficiary
RRSP maturity options: RRIF, life annuity, term-certain annuity to 90, or lump sum. The term-certain option provides estate certainty without longevity protection.
Why the other options are wrong
- BRRIF and life annuity are also options.
- CIt is a legal maturity option.
- DThe term-certain annuity ends at age 90; it does not pay for life.
Exam tip
RRSP maturity: RRIF, life annuity, term-certain to 90, cash.
Common mistake
Forgetting the term-certain-to-90 option exists.
What this tests
CISRO competency component 2.3 — 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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