LLQP Segregated Funds & Annuities · Component 4.2 · 10% of the exam
When the beneficiary of a segregated fund is a minor, the death benefit:
- AGoes to the parents automatically, since they are the child's natural guardians and manage the child's property
- BIs forfeited to the insurer until the child reaches majority, when a new claim can be made
- CIs paid to the minor directly, since the designation names the child and the insurer must follow it
- Is paid to the named trustee, or held or paid to a court-appointed guardian or public trustee until majority
Correct answer: D) Is paid to the named trustee, or held or paid to a court-appointed guardian or public trustee until majority
Naming a trustee avoids court involvement. The agent should have addressed this at implementation.
Why the other options are wrong
- AParents are not automatically trustees of a minor's property.
- BA minor's death benefit is never forfeited; it is held until majority.
- CMinors cannot receive the proceeds directly.
Exam tip
Minor beneficiary claim: trustee or public trustee/guardian.
Common mistake
Leaving no trustee for a minor beneficiary.
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.