LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
For a registered segregated fund with the spouse named as beneficiary or successor annuitant:
- AFull tax applies immediately on the deceased's final return, since a registered plan is deemed disposed of at death whoever inherits it
- The proceeds roll to the spouse's plan or the RRIF continues, tax-deferred, using the rollover forms
- CNo rollover exists for segregated funds, since the insurance wrapper prevents the plan from transferring
- DThe spouse pays probate on the proceeds, since a registered plan cannot pass by designation to a spouse
Correct answer: B) The proceeds roll to the spouse's plan or the RRIF continues, tax-deferred, using the rollover forms
Spousal rollovers preserve tax deferral. The claim process includes the transfer election.
Why the other options are wrong
- ADeferral is available to a spouse.
- CA tax-deferred spousal rollover exists for registered plans.
- DA named spouse receives the registered proceeds without probate.
Exam tip
Spouse: rollover/continuation, tax deferred.
Common mistake
Paying a spouse the RRIF in cash and triggering full tax.
What this tests
CISRO competency component 4.2 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 4
- A client's daughter was born last month and the client wants her added to the segregated fund designation. The agent should:
- A client wants to withdraw part of his segregated fund before maturity. The agent should explain:
- A client's segregated fund contract is approaching its maturity date. The insurer will:
- A client asks to add her adult son as a joint owner of her non-registered segregated fund contract. The agent should explain that:
- A client wants to replace the beneficiary on a contract where the current designation was made irrevocable. The agent must explain that:
- A client who has lost her job asks to pause her pre-authorized monthly contributions for six months. The agent should:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.