LLQP (Life Licence Qualification Program) Practice Exam · Question
What is a primary reason a conservative investor might prefer a segregated fund over a mutual fund?
Unlike mutual funds, segregated fund contracts often include a 'Guaranteed Minimum Withdrawal Benefit' (GMWB) or a death benefit guarantee (75% or 100%) that pr
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Question: What is a primary reason a conservative investor might prefer a segregated fund over a mutual fund?
Answer options:
- Lower management expense ratios (MERs).
- Higher historical returns. ✅ Protection of principal through death and maturity guarantees.
- The ability to trade funds multiple times per day.
Correct answer: Protection of principal through death and maturity guarantees.
Explanation: Unlike mutual funds, segregated fund contracts often include a 'Guaranteed Minimum Withdrawal Benefit' (GMWB) or a death benefit guarantee (75% or 100%) that protects a portion of the principal against market downturns.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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