LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
When a client will be the owner but wants her spouse to receive the contract on her death and continue it (non-registered seg fund), the recommendation might use:
- AThe estate as beneficiary, so the executor can transfer the contract to the spouse under the will
- BA minor grandchild as beneficiary, so the contract continues for the longest possible period
- Joint ownership with survivorship or a successor owner, with the spouse as beneficiary, and tax reviewed
- DNo designation at all, since a contract with no beneficiary automatically continues for the surviving spouse
Correct answer: C) Joint ownership with survivorship or a successor owner, with the spouse as beneficiary, and tax reviewed
Continuation structures avoid an unwanted payout at first death. Provincial law and contract terms govern availability.
Why the other options are wrong
- ANaming the estate loses probate bypass and triggers payout.
- BNaming a minor has nothing to do with continuing the contract for a spouse.
- DNo designation means the benefit defaults to the estate.
Exam tip
Successor owner / joint ownership for continuation; check contract and tax.
Common mistake
Naming a beneficiary when the client wanted the contract to continue.
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.