LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
Parents ask how to invest education savings for two children, one starting studies in three years and one in fifteen. The agent should recommend:
- Athe same aggressive growth allocation for both, since the plan is a single account
- different allocations, with the nearer goal held conservatively and the distant one for growth
- Cdelaying all deposits until the older child has actually finished post-secondary studies
- Dthe same conservative allocation for both, since education money must never be at risk
Correct answer: B) different allocations, with the nearer goal held conservatively and the distant one for growth
Horizon drives the allocation, and two goals inside one plan can be tracked separately. The money needed soon should be protected from a decline while the younger child's share still has time to recover from one.
Why the other options are wrong
- AAn aggressive allocation puts the money needed in three years at real risk.
- CDelaying deposits forfeits both growth and the grants available on contributions.
- DHolding the younger child's share in cash for fifteen years gives up needed growth.
Exam tip
When one account serves two dates, allocate to each goal's own horizon.
Common mistake
Applying a single allocation to an education plan serving children of different ages.
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.