LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
For an annuity purchase, the implementation requirements include:
- The application, proof of age, source and type of funds, spousal forms if locked-in, and acknowledgment of irrevocability
- BNothing beyond a cheque and a signature, since an annuity is a simple deposit product issued on request
- CA medical examination in every case, since the insurer must assess the annuitant's life expectancy before it can price the contract
- DA credit report on the annuitant, since the insurer is entering a long-term financial obligation with the client
Correct answer: A) The application, proof of age, source and type of funds, spousal forms if locked-in, and acknowledgment of irrevocability
Proof of age is a specific annuity requirement; irrevocability acknowledgment protects both parties.
Why the other options are wrong
- BSubstantial documentation is required.
- CMedicals apply only for impaired annuities.
- DA credit report is not required for an annuity purchase.
Exam tip
Annuity: proof of age, fund type, spousal forms, irrevocability acknowledgment.
Common mistake
Failing to obtain proof of age, delaying issue.
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.