LLQP Segregated Funds and Annuities module
This is the module where arithmetic decides the result. Segregated fund guarantees, the effect of a withdrawal or a reset, annuity payments and registered plans all come back as short numeric cases. Like Life and A&S, it has 30 scored questions plus 5 pilots in 75 minutes, and you need 60%.
Format
30 scored multiple-choice questions and 5 unscored pilot questions, in 75 minutes. Each question has four options and one correct answer. You need 18 of the 30 scored questions. The module is required for the full life licence and not for the A&S-only licence.
Budget your time differently here. A definition question takes thirty seconds; a guarantee calculation after a withdrawal and a reset can take three minutes. If a calculation stalls, flag it and return once the quick questions are done.
What a segregated fund is
A segregated fund is an individual variable insurance contract issued by an insurer. The client’s money is invested in a fund held separately from the insurer’s general assets, and the contract adds insurance features that a mutual fund does not have: a maturity guarantee, a death benefit guarantee, the possibility of naming a beneficiary, and potential creditor protection in some circumstances.
The parties have names you must not mix up: the contract holder owns the contract, the annuitant is the person whose life determines the death benefit, and the beneficiary receives it.
Exam trap
The death benefit guarantee is triggered by the death of the annuitant, not of the contract holder. When the two are different people, read the case twice.
Guarantee calculations
Three mechanisms move the guaranteed amount. Questions often combine two of them.
Deposits
The guarantee equals deposits multiplied by the guarantee level stated in the contract, for example 75% or 100%.
Withdrawals
Under the proportional method, the guarantee falls by the same percentage as the market value withdrawn. When the market is down, the guarantee drops by more than the dollars taken out.
Resets
Where the contract allows it, a reset locks in a higher market value as the new guarantee, usually with a new maturity date. Know what is gained and what is given up.
Worked case
A client in Ottawa deposits $100,000 in a contract with a 100% maturity guarantee. Two years later the market value is $125,000 and she resets: the guarantee becomes $125,000. Later the market value falls to $100,000 and she withdraws $20,000, which is 20% of the market value. The guarantee falls by 20%, from $125,000 to $100,000. At maturity the market value is $70,000: the insurer adds $30,000.
Check variations of this case with the segregated fund guarantee calculator. Information folders state the exact method a contract uses; on the exam, the question gives you what you need.
Annuities
The annuity half of the module asks you to match a product to a client’s retirement income need.
| Annuity | What it does | Typical exam angle |
|---|---|---|
| Term-certain | Pays for a fixed period, whether the annuitant lives or not | Payment calculation; what happens at death |
| Straight life | Pays for life, nothing after death | Highest income, no residual value |
| Life with guarantee period | Pays for life, with a minimum number of payments | Who receives the remaining payments |
| Joint and last survivor | Pays until the second death | Lower payment than a single life annuity |
| Deferred or immediate | Payments start later or right away | Accumulation phase versus payout phase |
A term-certain payment is ordinary annuity arithmetic. Our annuity payment calculator shows both end-of-period and start-of-period timing.
Registered and group plans
Segregated funds and annuities can sit inside registered plans. Questions test the logic of each plan rather than current dollar limits: what contributions do for taxable income, how withdrawals are taxed, and what conversion options exist at retirement. Group retirement and savings plans appear too, with the same questions about who the plan holder is and what an employee keeps on leaving.
The study program includes a taxation refresher module for these questions; see the LLQP study program.
2026 national guidance
On April 29, 2026, New Brunswick’s regulator published Insurance Bulletin 2026-01 on the National Consolidated Segregated Funds Guidance. It is useful context for anyone who will sell these products. The exam itself is written against the harmonized curriculum, whose latest finalized version on the CISRO site dates from May 2015, so study the curriculum first and treat the guidance as background for your practice.
Try a question
Dev and Priya, a married couple, open a joint investment account. Dev wants an aggressive portfolio; Priya says even a 5% drop would keep her awake. What should the agent do?
Both holders are clients, and both attitudes matter.
See the answer and explanation
Correct answer: A. In a joint account both holders' circumstances and attitudes must be considered. The agent reconciles the differences through discussion, normally giving weight to the more cautious holder, and documents the profile agreed jointly.
Practise a full set on this module with the free Segregated Funds practice test.
Is the Segregated Funds module the hardest?
It is the most calculation-heavy. Once the guarantee rules are automatic, its questions become predictable. Skipping the maths is the riskiest way to prepare it.
Do I need to know current RRSP or TFSA limits?
Exam questions focus on how the plans work. Learn the mechanics first; if a question needs a figure, it normally provides it.
What is the difference between a segregated fund and a mutual fund?
A segregated fund is an insurance contract with maturity and death benefit guarantees, beneficiary designation and possible creditor protection. A mutual fund is a securities product without those insurance features.
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Sources
- Alberta Insurance Council: LLQP exam format
- FCNB: Insurance Bulletin 2026-01, National Consolidated Segregated Funds Guidance
- CISRO: curriculum and sample questions
Checked October 21, 2026.