TNL LLQP Segregated Funds and Annuities Practice Exam

Question: 1 / 400

What happens to the investment in a segregated fund upon the death of the investor?

The investment is lost and no benefits are paid out

The market value is paid out to the estate only

A death benefit is paid to the designated beneficiary

When an investor in a segregated fund passes away, a death benefit is specifically designed to be paid out to the designated beneficiary. This is one of the key advantages of segregated funds, as they provide a form of life insurance coverage. The death benefit typically guarantees that a minimum amount will be paid to the beneficiary, regardless of the market value of the investment at the time of death. This ensures that the investor's intent to provide for their beneficiary can be fulfilled, and it also allows for the investment to bypass the probate process, offering a more efficient transfer of assets.

This feature is particularly appealing to individuals who wish to safeguard their investments for loved ones after their death. By naming a beneficiary, the investor can specify who will receive the death benefit, ensuring that their financial legacy is honored according to their wishes.

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The investment is returned to the insurer

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