LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
The named beneficiary of a deceased client's segregated fund lives outside Canada. The agent should explain that the claim:
- can proceed, though identification, tax reporting and payment arrangements may take longer
- Bcannot be paid, since insurers may only pay death benefits to residents of Canada
- Cmust be converted into an annuity payable in the beneficiary's own country of residence
- Dwill be paid to the estate instead, because a foreign beneficiary designation is not valid
Correct answer: A) can proceed, though identification, tax reporting and payment arrangements may take longer
A designation is valid regardless of where the beneficiary lives. The insurer still needs satisfactory identification and may have withholding or reporting obligations, so the agent should set realistic expectations about timing.
Why the other options are wrong
- BResidency in Canada is not a condition of receiving a death benefit.
- CThe beneficiary is not required to take the proceeds as an annuity.
- DA valid designation is not displaced because the beneficiary lives abroad.
Exam tip
A foreign beneficiary is valid; expect extra identification and reporting steps.
Common mistake
Telling a family that a beneficiary abroad cannot be paid.
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.