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

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)

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)

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

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.