LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
For a client who wants to keep control over the death benefit's use by a young beneficiary, the recommendation might include:
- ANaming the estate, so the executor can hold the money until the beneficiary reaches a sensible age
- BLeaving the beneficiary blank until the child is old enough to be named directly
- CNaming the minor directly, since the insurer will hold the proceeds in trust until the age of majority
- Naming a trustee for the minor or using a settlement option to pay instalments
Correct answer: D) Naming a trustee for the minor or using a settlement option to pay instalments
Minor beneficiaries require a trustee designation; settlement options control payout. Both are recommendation details.
Why the other options are wrong
- ANaming the estate loses probate bypass.
- BLeaving no beneficiary means the death benefit defaults to the estate.
- CInsurers cannot pay minors; funds go to a court-appointed guardian or trustee.
Exam tip
Minor beneficiary → trustee; consider settlement options.
Common mistake
Naming a minor child without a trustee.
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.