LLQP SEGREGATED FUNDS PRACTICE
SOLUTION TESTED QUESTIONS COMPLETE
ANSWER RESOURCE
●● What is longevity risk?
Answer: The risk of outliving one's retirement fund.
●● Who are the two parties involved in an annuity contract?
Answer: The issuer (usually an insurance company) and the annuitant
(or policyholder).
●● What is the difference between an immediate and a deferred annuity?
Answer: Immediate annuities are purchased with a lump-sum for regular
payouts, while deferred annuities allow premiums to be paid over time.
●● What is Assuris?
Answer: A non-profit organization that protects policyholders if an
insurance company becomes insolvent.
●● What is the guarantee provided by Assuris for annuity policyholders?
Answer: Up to $2,000 per month or 85% of the promised monthly
income benefit, whichever is higher.
,●● What is the role of the Office of the Superintendent of Financial
Institutions (OSFI)?
Answer: To monitor the solvency of insurance companies and ensure
they maintain sufficient reserve capital.
●● What is the Canadian Life and Health Insurance Association
(CLHIA)?
Answer: A voluntary association representing life and health insurance
companies that also advocates for the public interest.
●● Are annuity payments affected by market volatility?
Answer: No, future annuity payments are guaranteed regardless of
financial market or economic conditions.
●● What is a straight life annuity?
Answer: An annuity that provides payments for the duration of the
annuitant's life.
●● What is a joint life annuity?
Answer: An annuity that provides payments over the lives of two or
more individuals.
●● What is a term-certain annuity?
,Answer: An annuity that provides payments for a specific, fixed period
of time.
●● What is a segregated fund?
Answer: An investment product with insurance features, such as
maturity guarantees, that distinguishes it from a mutual fund.
●● What is a maturity guarantee in a segregated fund?
Answer: A feature that guarantees a portion of the principal investment
will be returned at a specific maturity date.
●● What is a Guaranteed Minimum Withdrawal Benefit (GMWB)?
Answer: A contract feature that guarantees a minimum level of income
withdrawals regardless of investment performance.
●● What is a death benefit guarantee?
Answer: A guarantee that a beneficiary will receive a minimum amount
if the annuitant dies before the contract matures.
●● What is a participating annuity?
Answer: An annuity where the holder may receive additional payments
based on the performance of the underlying assets.
●● What is a prescribed annuity?
, Answer: An annuity structured to provide level, tax-efficient payments
over the life of the contract.
●● What is an impaired life annuity?
Answer: An annuity that provides higher payments to individuals with a
reduced life expectancy due to health issues.
●● What is a split annuity?
Answer: A strategy combining two different annuity products to balance
immediate income needs with long-term capital growth.
●● What is an indexed annuity?
Answer: An annuity where payments are adjusted periodically based on
an inflation index or other benchmark.
●● What is a structured settlement?
Answer: A series of periodic payments, often used in legal settlements,
designed to provide long-term financial security.
●● What is an instalment refund annuity?
Answer: An annuity that guarantees payments will continue to a
beneficiary if the annuitant dies before the total premium is recovered.
●● What is an integrated annuity?
SOLUTION TESTED QUESTIONS COMPLETE
ANSWER RESOURCE
●● What is longevity risk?
Answer: The risk of outliving one's retirement fund.
●● Who are the two parties involved in an annuity contract?
Answer: The issuer (usually an insurance company) and the annuitant
(or policyholder).
●● What is the difference between an immediate and a deferred annuity?
Answer: Immediate annuities are purchased with a lump-sum for regular
payouts, while deferred annuities allow premiums to be paid over time.
●● What is Assuris?
Answer: A non-profit organization that protects policyholders if an
insurance company becomes insolvent.
●● What is the guarantee provided by Assuris for annuity policyholders?
Answer: Up to $2,000 per month or 85% of the promised monthly
income benefit, whichever is higher.
,●● What is the role of the Office of the Superintendent of Financial
Institutions (OSFI)?
Answer: To monitor the solvency of insurance companies and ensure
they maintain sufficient reserve capital.
●● What is the Canadian Life and Health Insurance Association
(CLHIA)?
Answer: A voluntary association representing life and health insurance
companies that also advocates for the public interest.
●● Are annuity payments affected by market volatility?
Answer: No, future annuity payments are guaranteed regardless of
financial market or economic conditions.
●● What is a straight life annuity?
Answer: An annuity that provides payments for the duration of the
annuitant's life.
●● What is a joint life annuity?
Answer: An annuity that provides payments over the lives of two or
more individuals.
●● What is a term-certain annuity?
,Answer: An annuity that provides payments for a specific, fixed period
of time.
●● What is a segregated fund?
Answer: An investment product with insurance features, such as
maturity guarantees, that distinguishes it from a mutual fund.
●● What is a maturity guarantee in a segregated fund?
Answer: A feature that guarantees a portion of the principal investment
will be returned at a specific maturity date.
●● What is a Guaranteed Minimum Withdrawal Benefit (GMWB)?
Answer: A contract feature that guarantees a minimum level of income
withdrawals regardless of investment performance.
●● What is a death benefit guarantee?
Answer: A guarantee that a beneficiary will receive a minimum amount
if the annuitant dies before the contract matures.
●● What is a participating annuity?
Answer: An annuity where the holder may receive additional payments
based on the performance of the underlying assets.
●● What is a prescribed annuity?
, Answer: An annuity structured to provide level, tax-efficient payments
over the life of the contract.
●● What is an impaired life annuity?
Answer: An annuity that provides higher payments to individuals with a
reduced life expectancy due to health issues.
●● What is a split annuity?
Answer: A strategy combining two different annuity products to balance
immediate income needs with long-term capital growth.
●● What is an indexed annuity?
Answer: An annuity where payments are adjusted periodically based on
an inflation index or other benchmark.
●● What is a structured settlement?
Answer: A series of periodic payments, often used in legal settlements,
designed to provide long-term financial security.
●● What is an instalment refund annuity?
Answer: An annuity that guarantees payments will continue to a
beneficiary if the annuitant dies before the total premium is recovered.
●● What is an integrated annuity?
