Seg Funds Segregated Fund Guarantees & Features question: beneficiaries receive in total

Seg FundsSegregated Fund Guarantees & Features

Rosalind, 71, a retired music teacher in Oakville, Ontario, deposited $200,000 in a non-registered segregated fund contract with a 100% death benefit guarantee and a 75% maturity guarantee. She named her two nephews as beneficiaries. She dies four years later, having made no withdrawals, when the contract is worth $170,000. What do her beneficiaries receive in total?

A $150,000
B $170,000
C $200,000
D $370,000

Show the answer and explanation

Answer: C. $200,000

The death benefit guarantee is 100% x $200,000 = $200,000. The value is $170,000, so the insurer tops up $30,000 and the beneficiary receives $200,000. $150,000 would be a 75% guarantee. Source: standard Canadian segregated fund and annuity contract terms (industry practice) (as at 12 Oct 2026).

Common mistake

Using a 75% guarantee when the contract has 100%.

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Kim, 66, a retired transit dispatcher in Winnipeg, Manitoba, deposited $100,000 in a segregated fund contract with a 100% death benefit guarantee. The contract reduces guarantees proportionally for withdrawals. After a market decline, when the contract was worth $80,000, she withdrew $20,000 to help her daughter with a wedding. Under proportional reduction, what is her new death benefit guarantee?Leon, 70, a retired air traffic controller in Lethbridge, Alberta, holds a segregated fund contract with a $120,000 guarantee that is reduced dollar-for-dollar by withdrawals. The contract's market value is $150,000. He withdraws $15,000 to buy a used camper van for a trip across the country. What is his new guarantee?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.