LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
For a client who wants a simple lifetime income with maximum estate protection and has ample assets, a suitable structure is:
- A life annuity with a long guarantee or cash refund for the floor, plus segregated funds with beneficiaries
- BAll equities in segregated funds, since the death guarantee protects the estate and the growth funds the income she needs
- CAll GICs laddered over five years, since guaranteed interest provides both income and a certain estate value
- DA straight life annuity with all of the assets, since it provides the simplest and highest lifetime income
Correct answer: A) A life annuity with a long guarantee or cash refund for the floor, plus segregated funds with beneficiaries
Combining annuity certainty with seg fund estate features serves both objectives.
Why the other options are wrong
- BAn all-equity portfolio provides no income certainty.
- CGICs offer no growth or estate features.
- DA straight life annuity provides no estate protection.
Exam tip
Income + estate: guaranteed annuity + seg funds with beneficiaries.
Common mistake
Choosing between income and estate instead of combining products.
What this tests
CISRO competency component 3.1 — 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.