LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
When an annuitant dies after the guarantee period of a single-life annuity:
- AThe premium is refunded to the estate less the payments received, since the insurer has not paid out the full value
- BThe beneficiary receives the balance of the payments that would have been made to normal life expectancy
- CPayments continue to the estate until the total paid equals the premium, so the insurer never keeps unearned money
- Payments stop and nothing further is payable, since mortality pooling funded the higher lifetime payments
Correct answer: D) Payments stop and nothing further is payable, since mortality pooling funded the higher lifetime payments
Explaining this at claim time is delicate; it should have been explained at sale.
Why the other options are wrong
- ANo premium is refunded after the guarantee period ends.
- BAfter the guarantee period there is no balance to pay.
- CPayments end at the annuitant's death; nothing goes to the estate.
Exam tip
After the guarantee period: payments end at death.
Common mistake
Family expecting a residual from a life annuity.
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.