LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
For a TFSA segregated fund opened for a client who has been a non-resident, the implementation must confirm:
- AThe beneficiary's residency, since a non-resident beneficiary cannot receive TFSA proceeds
- BNothing beyond the application, since TFSA eligibility is checked by the CRA after the plan is registered
- COnly the fund choice, since the TFSA rules are the same for residents and non-residents
- Residency status, since non-residents accrue no room and are penalized on contributions, plus the SIN
Correct answer: D) Residency status, since non-residents accrue no room and are penalized on contributions, plus the SIN
Registered plan eligibility depends on residency and SIN. Errors trigger penalty tax.
Why the other options are wrong
- AThe holder's residency matters, not the beneficiary's.
- BResidency is material and must be confirmed at set-up.
- CEligibility for a TFSA must be confirmed before fund selection matters.
Exam tip
TFSA: confirm residency and SIN; no room while non-resident.
Common mistake
Opening a TFSA for a non-resident.
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:
- 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.