LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
Deposit insurance versus insurer protection: a client's segregated fund contract is protected by:
- ANothing, since insurance contracts fall outside every deposit and investor protection scheme
- BThe provincial government, which guarantees insurance contracts issued to its residents
- Assuris, which protects a percentage of guaranteed amounts if a life insurer fails
- DCDIC, which covers segregated fund deposits in the same way as bank deposits
Correct answer: C) Assuris, which protects a percentage of guaranteed amounts if a life insurer fails
Assuris covers life insurance products, including segregated fund guarantees, within limits. CDIC covers bank deposits.
Why the other options are wrong
- AAssuris provides protection for guaranteed amounts.
- BProvinces regulate insurers but do not guarantee contracts.
- DCDIC covers deposits, not insurance contracts.
Exam tip
Seg fund guarantees → Assuris protection (limits). Deposits → CDIC.
Common mistake
Telling a client Assuris protects the market value of a seg fund.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
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