LLQP (Life Licence Qualification Program) Practice Exam · Question
What is the function of a 'Reset Option' in a Segregated Fund contract?
A 'reset' allows the contract holder to lock in market gains by increasing the guaranteed maturity and death benefit amounts to a percentage of the current mark
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Question: What is the function of a 'Reset Option' in a Segregated Fund contract?
Answer options:
- The ability to change the beneficiary once per year.
- The process of moving funds from a bond fund to an equity fund. ✅ The option to lock in market gains by increasing the guaranteed base.
- The automatic cancellation of the policy if the market drops.
Correct answer: The option to lock in market gains by increasing the guaranteed base.
Explanation: A 'reset' allows the contract holder to lock in market gains by increasing the guaranteed maturity and death benefit amounts to a percentage of the current market value (if higher than the original). This also usually restarts the 10-year maturity period.
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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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