LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
The effective date of a segregated fund deposit is:
- AThe maturity date of the guarantee, since that is the date on which the insurer's obligation to the client begins
- BThe date the client signed the application, since the contract is formed when the client makes the offer
- CThe client's next birthday, since the insurer aligns every contract with the annuitant's age for guarantee purposes
- The valuation date on which the insurer receives the completed application and funds, at that day's unit value
Correct answer: D) The valuation date on which the insurer receives the completed application and funds, at that day's unit value
Units are purchased at the next valuation after receipt. Guarantee terms run from the deposit.
Why the other options are wrong
- AMaturity is the guarantee's end, not the deposit date.
- BReceipt of funds and application governs, not signing.
- CThe client's birthday has no bearing on the deposit's effective date.
Exam tip
Deposit effective at next valuation after complete receipt.
Common mistake
Promising the unit price on the day the client signed.
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.