LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
For a deferred annuity implemented for a client, the agent should confirm:
- AThe management expense ratio, since a deferred annuity's costs are deducted from the accumulating value each year like a fund
- The guaranteed rate and term, maturity options, surrender charges, tax treatment, and beneficiary
- CThe fund selection and allocation, since a deferred annuity's growth depends on the funds chosen
- DOnly the guaranteed rate, since a deferred annuity has no other terms that affect the client
Correct answer: B) The guaranteed rate and term, maturity options, surrender charges, tax treatment, and beneficiary
Deferred annuities have distinct terms; delivery should confirm them.
Why the other options are wrong
- AA fixed-rate deferred annuity has no management expense ratio.
- CFixed-rate annuities have no funds to select.
- DMore than the rate matters, especially surrender charges.
Exam tip
Deferred annuity delivery: rate, term, maturity options, charges, tax, beneficiary.
Common mistake
Not disclosing surrender charges on a deferred annuity.
What this tests
CISRO competency component 3.2 — 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:
- The agent's record of the implementation should be retained:
- Implementation is complete when:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.