LLQP Reviews Questions

In Quebec, an irrevocable beneficiary designation remains in effect even after a divorce, unless the policyholder takes steps to change it. Because Rajbir is designated as the irrevocable beneficiary, Surjit would require Rajbir’s consent to alter the beneficiary designation. Since Surjit intends to keep Rajbir as the beneficiary, he does not need to take any additional action, as the irrevocable beneficiary status remains in force. Surjit cannot change or remove Rajbir as the beneficiary without her consent, so his current designation remains unaffected by the divorce under LLQP guidelines and Quebec civil code rules on irrevocable beneficiaries​​.

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Kadiha’s investment in a segregated fund with a 75% maturity guarantee means that upon maturity, she is guaranteed to receive 75% of her original investment, which would be $7,500 (75% of $10,000). The payment is considered part of the maturity guarantee under segregated fund contracts, and the difference paid out by the insurer to meet the guarantee ($2,500 in this case) is not subject to capital gains or interest income tax as it’s part of the guaranteed benefit. According to LLQP guidelines, segregated funds with such guarantees only tax the difference as capital gains if the payout exceeds the original investment, which is not applicable here​​.

Beneficiary changes in insurance contracts generally become effective once the insurer receives and processes the signed change form. This is supported by LLQP material, which specifies that changes to beneficiary designations must be documented and received by the insurer for the new designation to take effect. Since Linda is a revocable beneficiary, Luisa can make this change without requiring Linda's consent​​.

Option B is incorrect as revocable beneficiaries do not require consent for changes. Option C is too general, and D is incorrect because a formal written change form is typically required.

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.