IFSE Institute Exam LLQP Topic 2 Question 1 Discussion

Actual exam question for IFSE Institute's LLQP exam

Question #: 1
Topic #: 2

Owen meets with his insurance agent, Rachel, to review his investments. Owen is interested in segregated funds. In particular, he wants to know more about the reset feature.

What should Rachel tell Owen about resetting his funds?

AAll segregated funds offer a reset feature.

BThe reset feature may be automatic.

CThere is no additional cost for a fund that provides a reset feature.

DThe reset feature can be used if the market value increases or decreases.

Show Suggested Answer

Suggested Answer: B

Rachel should inform Owen that some segregated funds offer an automatic reset feature, which adjusts the guaranteed value periodically based on the fund's market performance. This can lock in gains during rising markets without requiring manual intervention. According to LLQP resources, automatic resets can occur on specific anniversaries or under certain conditions specified in the contract.

Option A is incorrect as not all segregated funds offer a reset feature. Option C is incorrect as there may be costs associated with funds that provide reset options. Option D is incorrect because resets typically lock in gains, not losses.

by Jerry at Oct 20, 2024, 11:15 PM

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