Free IFSE Institute LLQP Practice Exam with Questions & Answers | Set: 9

Sasha’s plan allows him to choose his own investments, and the company is required to contribute, while his own contributions are optional. This structure is indicative of a DefinedContribution Pension Plan (DCPP). In a DCPP, the employer contributes a fixed amount to the employee’s retirement plan, and employees often have control over how their funds are invested. Employee contributions are typically voluntary, as outlined by LLQP guidelines on pension plans​.

Options B, C, and D do not match because Defined Benefit Plans do not provide investment choice, DPSPs usually have discretionary employer contributions, and group RRSPs are not pension plans and typically involve mandatory employee contributions.

Given Harry’scost sensitivityandfamily health history, the75% maturity and 100% death benefitcombination offerslower costscompared to a full 100%/100% guarantee while still ensuring full death benefit protection for his heirs.

Exact Extract:

"Clients concerned about cost but needing strong death benefit protection often select 75% maturity guarantees combined with 100% death benefit guarantees."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.1.1 Guarantees​)

Upon termination of employment, employees cantransfer group RRSP funds to an individual RRSPto maintain tax-deferred growth without triggering a taxable event.

Exact Extract:

"Upon leaving employment, a member may transfer their group RRSP assets to an individual RRSP to maintain tax deferral."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11.2 Group Plans【45:5†Segfunds-E313-2020-12-7ED.pdf**)

Since Justin’s annuity hadno guaranteed periodandno survivor benefit,payments stop at death. Thus,no death claim can be made.

Exact Extract:

"For a single life annuity with no guarantee period, payments cease upon the death of the annuitant, and no death claim can be made."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 3.2.2.1 Single Life Contract【49:4†Segfunds-E313-2020-12-7ED.pdf**)

With afront-end sales charge, the investor pays a fee upfront, butno feesare deducted from ongoing investments or redemptions, andmanagement expensesare generally lower compared to deferred options. This matches Philip’s desire for no reductions or surprises after investing.

Exact Extract:

"Front-end sales charges are paid at the time of purchase. As a result, no further charges apply when units are sold, and investors benefit from a full investment of funds thereafter."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.3.2.1 Front-End Sales Charge​)

Since Diu had designated her son Shan as the primary beneficiary and her niece Haru as the contingent beneficiary, the death benefit from the annuity will pass to Haru, the contingent beneficiary, after Shan's death. In annuity contracts, if the primary beneficiary predeceases the annuitant and no changes are made to the designation, the benefits will typically go to the contingent beneficiary. According to LLQP principles, a contingent beneficiary is entitled to receive the remaining guaranteed payments when the primary beneficiary is no longer able to do so​​.

Option A is incorrect as Shan’s widow is not mentioned as a beneficiary. Option B is incorrect as Shan's estate would not receive the benefits if a contingent beneficiary exists. Option D is incorrect as Diu’s estate would only receive the benefits if no beneficiaries were named.

Money market segregated fundsare considered the least risky because they invest in short-term, high-quality investments and offer principal preservation features. They also benefit from thecreditor protectionassociated with segregated fund contracts.

Exact Extract:

"Money market funds aim to preserve capital by investing in highly liquid, low-risk instruments. Segregated fund contracts may also offer creditor protection if structured appropriately."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.2.1 Money Market Funds​)

Agroup TFSAallows employees to withdraw fundsat any time without triggering taxes or penalties, meeting Germaine’s requirement perfectly.

Exact Extract:

"TFSAs allow contributions with after-tax dollars and withdrawals at any time without tax penalties, making them ideal for flexible saving plans."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11.2 Group Plans​)

Most group benefits, including medical, dental, and retirement plans, require employees to complete astandard waiting period(e.g., 3 months) before they become eligible for enrollment.

Exact Extract:

"Group insurance plans often impose a standard waiting period before new employees become eligible for coverage."

(Reference:Sickness-E312-2020-12-7ED, Chapter 2.3.3.1 Qualification Period【45:3†Sickness-E312-2020-12-7ED.pdf**)