Seg Funds Annuities & Group Retirement Plans question: life annuity with a 15-year guarantee and names

Seg FundsAnnuities & Group Retirement Plans

Carl, 66, a retired electrician in Moncton, New Brunswick, buys a life annuity with a 15-year guarantee and names his wife, Marisol, 60, as beneficiary. He dies after receiving payments for 6 years. What happens?

A A refund of the whole premium to his estate
B 9 more years of payments to his beneficiary
C Payments to his beneficiary for her whole life
D Payments stop immediately on his death

Show the answer and explanation

Answer: B. 9 more years of payments to his beneficiary

A guarantee period ensures payments for at least that period. If the annuitant dies within it, payments (or their commuted value) continue to the beneficiary for the rest of the period: 15 - 6 = 9 years. Source: CISRO LLQP Curriculum (May 2015), Segregated Funds and Annuities module, component 2.3 (annuities); standard Canadian segregated fund and annuity contract terms (industry practice) (as at 12 Oct 2026).

Common mistake

Forgetting the guarantee period continues after death.

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Related Seg Funds practice questions

Carl bought a life annuity with a 15-year guarantee at age 65 and named his niece as beneficiary. He lived well into his eighties and had received 18 years of payments when he died at 83. His niece calls the insurer to ask what she is entitled to. What does his beneficiary receive?Bea, 73, a widowed former shop owner in Brandon, Manitoba, used $150,000 of her non-registered savings to buy a straight life annuity after comparing quotes from three insurers. Her will leaves everything to her two daughters. She dies of a stroke after receiving 2 years of payments. What do her heirs receive from the annuity?Ana, 47, lives in Winnipeg, Manitoba, with her husband and two teenagers. Three years ago she bought a non-registered segregated fund contract with a 10-year maturity guarantee and a deferred sales charge schedule. She now calls her agent to say she has lost her job as a warehouse supervisor and will need cash for household bills within 6 months. Her husband's wages cover about half of the family's expenses. Apart from the contract, she has $15,000 in a savings account and no other investments. What should the agent do?

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.