LLQP Segregated Funds and Annuities 2

Question 1

What is the minimum maturity guarantee required by Canadian insurance regulators for segregated fund contracts?

Accepted Answer

75% of deposits

Answer

50% of deposits

Answer

100% of deposits

Answer

There is no minimum guarantee requirement

Question 2

What is the 'reset' feature in a segregated fund contract?

Accepted Answer

The ability to lock in market gains by resetting the guarantee amount to the current market value

Answer

The ability to reset the contract to zero and start over

Answer

The ability to reset the maturity date to an earlier date

Answer

The ability to change the fund selection without fees

Question 3

How are segregated fund death benefit proceeds treated for estate planning purposes in Canada?

Accepted Answer

They can bypass probate and pass directly to the named beneficiary

Answer

They must go through probate like all other assets

Answer

They are always subject to estate administration tax

Answer

They must be included in the deceased's final tax return as income

Question 4

What is a 'life annuity' and how does it provide retirement income?

Accepted Answer

A contract that provides guaranteed periodic income payments for the annuitant's lifetime

Answer

A one-time lump sum payment at retirement

Answer

A short-term savings account for retirement

Answer

A term life insurance policy that pays out at retirement

Question 5

What is the key difference between a segregated fund and a mutual fund in terms of creditor protection?

Accepted Answer

Segregated funds may offer creditor protection when a family-class beneficiary is named, while mutual funds generally do not

Answer

There is no difference in creditor protection

Answer

Mutual funds offer better creditor protection

Answer

Both offer identical creditor protection under federal law

Question 6

What is a 'prescribed annuity' under Canadian tax law?

Accepted Answer

An annuity where the taxable portion of each payment is level over the payment period

Answer

An annuity prescribed by a doctor for health reasons

Answer

An annuity that is mandatory for all retirees

Answer

An annuity prescribed by the CRA as the only permitted retirement income