LLQP Segregated Funds & Annuities · Component 2.3 · 30% of the exam
Assuris protection for annuity payments guarantees:
- AFull payments regardless of size, since the industry fund is required to make every annuitant whole
- A stated percentage of monthly income, with full coverage below a threshold, if the insurer fails
- CNothing for annuities, since Assuris covers only life insurance death benefits
- DThe market value of the annuity, which the client can then use to buy a replacement contract
Correct answer: B) A stated percentage of monthly income, with full coverage below a threshold, if the insurer fails
Assuris limits are per insurer, per class of benefit. Diversifying large annuity purchases across insurers is prudent.
Why the other options are wrong
- ACoverage is capped by percentage above a threshold.
- CAssuris protection exists for annuity payments, within limits.
- DAnnuities have no market value.
Exam tip
Assuris: percentage of monthly income above a threshold; diversify large annuities.
Common mistake
Ignoring Assuris limits on a very large single-insurer annuity.
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
Timed sets weighted like the exam, and review of every question you miss. Free to start.