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LLQP Segregated Funds & Annuities Cheatsheet — Decision Tables, Rules & Glossary

Comprehensive LLQP Segregated Funds & Annuities cheat sheet: investor fact-find, seg fund vs mutual fund trade-offs, guarantee and beneficiary concepts, annuity selection, common traps, and a glossary.

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Use this as your last‑mile review. Pair it with the Syllabus for coverage and Practice for speed.

Seg Funds & Annuities in one picture (fit > features)

    flowchart TD
	  A["Investor story"] --> B["Goal: growth / protection / income / estate"]
	  B --> C["Constraints: horizon + liquidity + risk capacity"]
	  C --> D["Product fit: seg fund vs mutual fund; annuity type"]
	  D --> E["Explain: guarantees + fees + restrictions + beneficiaries"]
	  E --> F["Document + service"]

Exam reflex: the best option usually ties a product feature to a constraint (time horizon, liquidity, risk).

Investor fact-find checklist (high yield)

Bucket What you need to know Why it matters
Goal growth, preservation, income, estate intent determines product “job”
Horizon how long the money can stay invested guarantees often reward longer horizons
Liquidity expected withdrawals, emergencies surrender/fees and restrictions matter
Risk capacity/tolerance ability/willingness to take loss product fit and allocation
Existing holdings concentration, existing guarantees avoids redundancy and mismatch
Registered context (high level) registered vs non-registered affects framing and suitability
Beneficiary intent who should receive proceeds insurance wrapper implications
Creditor concerns business owner/professional planning implications (jurisdiction- and fact-specific)

Best-answer elimination rule: if the stem lacks horizon or liquidity needs, prefer the answer that clarifies them before recommending.

Segregated funds: what you must read correctly (high level)

Segregated funds are insurance contracts with an underlying investment component. They’re often tested as a trade-off:

  • Potential benefits: guarantees and beneficiary/settlement features (policy- and jurisdiction-specific).
  • Trade-offs: costs and restrictions can be higher than non-insurance investment funds.

Seg funds vs mutual funds (exam-friendly compare; high level)

Dimension Segregated funds (concept) Mutual funds (concept)
Wrapper insurance contract securities investment fund
Guarantees maturity/death guarantees may apply (policy-specific) no insurance guarantees
Beneficiaries beneficiary designations are central beneficiary handled via account/estate structure
Fees includes investment + insurance/guarantee costs typically investment management fees
Best when client values guarantees/insurance features and accepts trade-offs client prioritizes cost/liquidity/standard investment structure

Guarantee and reset ideas (high level)

  • Maturity guarantee: floor at maturity date(s) (policy-specific).
  • Death benefit guarantee: floor on death benefit (policy-specific).
  • Resets: may “lock in” gains but can have rules/limits (policy-specific).

Trap: treating guarantees as unconditional or free; there are usually fees and conditions.

Fees: the compounding trap

Higher fees reduce net returns over time. When two answers both “work,” the better one often:

  • matches the feature to the client’s goal, and
  • acknowledges cost/restriction trade-offs.

Annuities: how to pick fast (high level)

Annuities are often tested as “income structure” decisions.

Quick classifier

Type What it does When it tends to fit
Immediate annuity income starts soon after purchase retirement income needs now
Deferred annuity income starts later future income planning
Life annuity pays for life longevity risk management
Term-certain annuity pays for a fixed term defined time-bound income need
Joint annuity covers two lives couple planning and survivor needs

Trap: recommending a long-term/irreversible income structure when the client needs liquidity or flexibility.

Implementation + disclosure checklist (what the exam rewards)

  • explain the goal fit (why this structure)
  • state the constraint fit (horizon/liquidity/risk)
  • disclose fees and key restrictions in plain language
  • explain guarantees as conditional and policy-specific
  • confirm beneficiary intent is consistent with the plan (fact-dependent)

Common exam traps

  • Recommending a long-horizon product when the client needs near-term liquidity.
  • Treating guarantees as unconditional or ignoring their cost.
  • Confusing product “job”: growth vs income vs protection vs estate intent.
  • Picking based on a single feature (e.g., “guarantee”) instead of overall suitability.

Glossary (high-yield)

  • Annuity: a contract that provides payments, often used for structured income (details are contract-specific).
  • Deferred annuity: annuity where income starts at a future date.
  • Immediate annuity: annuity where income starts soon after purchase.
  • Life annuity: annuity paying as long as the annuitant lives (contract-specific options may apply).
  • Term-certain annuity: annuity paying for a fixed term.
  • Segregated fund: insurance-based investment contract with an underlying investment component and potential guarantees (policy-specific).
  • Maturity guarantee: a guaranteed minimum value at maturity date(s) (policy-specific).
  • Death benefit guarantee: a guaranteed minimum benefit payable on death (policy-specific).
  • Reset: feature that can lock in investment gains for guarantee purposes (policy-specific).
  • Beneficiary designation: instructions naming who receives proceeds on death (rules and implications can vary).
  • Surrender/withdrawal restrictions: limitations and charges that can apply when money is withdrawn (product-specific).

✅ Next: use the Syllabus to pick a topic and run a short drill via Practice.

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