- (Topic 5)
Remi owns a registered annuity contract that pays him a $2,500 monthly benefit. He purchased the contract five years ago from money he accumulated in his registered pension plan. At the time, he named his wife Annette as the revocable beneficiary of the contract. Today, he calls Louisa, his insurance agent, to designate his sister as beneficiary of the contract instead. Louisa tells him that there are restrictions on the contract and that he cannot change the beneficiary designation.
Why is Remi unable to make the change?

1. A. He is already receiving payments from the contract.
2. B. He would first have to obtain his wife's consent to change it.
3. C. He did not complete the change of beneficiary form.
4. D. The contract was funded by a registered pension plan.

Correct Answer: D
Since Remi??s annuity was purchased with funds from his registered pension plan, it is likely subject to locking-in provisions, which restrict changes to the beneficiary designation once annuitized. LLQP guidelines state that pensions converted into registered annuities are generally subject to locking-in rules, which often prevent changes to beneficiary designations unless in cases of spousal consent or specific contractual allowances.
Option B is incorrect, as spousal consent is not relevant when the designation is already restricted. Options A and C are also incorrect, as they do not address the locking-in nature tied to the pensionplan.

- (Topic 5)
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?

1. A. All segregated funds offer a reset feature.
2. B. The reset feature may be automatic.
3. C. There is no additional cost for a fund that provides a reset feature.
4. D. The reset feature can be used if the market value increases or decreases.

Correct 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.

- (Topic 3)
Juliette owns a medium-sized business with approximately 100 employees. Three years ago, she set up a small group benefits plan. Her employees, however, are unhappy with the coverages offered under the plan. Moreover, for tax purposes, the group plan shares the cost of disability premiums with the employees—an expense they do not welcome. What should Juliette??s agent tell her?

1. A. She should instead opt for an EHT, which affords more flexibility with no tax implications for her employees.
2. B. She should instead opt for a PHSP, which provides more flexible and tax-free disability benefits.
3. C. Her existing group plan is the best solution, because a group of that size would not be able to take advantage of other ??grouped?? alternatives.
4. D. The existing group plan is the most cost-effective and tax-free way to provide these benefits.

Correct Answer: B
Comprehensive and Detailed Explanation:
A Private Health Services Plan (PHSP) offers flexible, tax-free benefits (employer-paid premiums are deductible, benefits non-taxable), addressing employee dissatisfaction and tax concerns (Chapter 8:Group Plan Specifics).
Option A: Incorrect; EHT (Employer Health Tax) isn??t insurance. Option B: Correct; PHSP fits needs.
Option C-D: Incorrect; group plan isn??t optimal or tax-free for employees. Reference: LLQP Accident and Sickness Insurance Manual, Chapter 8:Group Plan Specifics.