LLQP (Life Licence Qualification Program) Practice Exam · Question
How is the annual income generated within a segregated fund treated for tax purposes?
Income generated within a segregated fund (dividends, interest, capital gains) is 'flowed through' to the contract holder annually and maintains its original ta
Start free practice for LLQP (Life Licence Qualification Program) Practice Exam
374 questions · no signup required · 40 free questions per day
Question: How is the annual income generated within a segregated fund treated for tax purposes?
Answer options:
- The insurer pays all taxes on the fund's growth. ✅ Income and capital gains are allocated to the contract holders annually.
- Tax is only paid when the contract is surrendered.
- Segregated funds are always tax-exempt.
Correct answer: Income and capital gains are allocated to the contract holders annually.
Explanation: Income generated within a segregated fund (dividends, interest, capital gains) is 'flowed through' to the contract holder annually and maintains its original tax character (e.g., dividend tax credit applies).
Start free practice for LLQP (Life Licence Qualification Program) Practice Exam
374 questions · no signup required · 40 free questions per day
More about LLQP (Life Licence Qualification Program) Practice Exam
Related Questions
- 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
- A personal non-registered permanent life insurance policy on Liam, a 40-year-old engineer in Montreal, has acc
- Universal life is:
More for LLQP (Life Licence Qualification Program) Practice Exam candidates
Study guides
Question explanations
- 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
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free LLQP (Life Licence Qualification Program) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.