LLQP Annuities & Registered Plans Practice Questions
Annuities & Registered Plans makes up 4 of every 50 questions on a Tigertest LLQP practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the harmonized LLQP's four modules, Canadian law and CCIR/CISRO guidance as of November 2026. Original questions; 50 per test, mixing the modules in proportion. Not affiliated with CISRO, any provincial regulator or the AMF.
1. A life annuity is designed mainly to protect against the risk of:
- A.Rising interest on debts
- B.Outliving one's savings
- C.Dying too soon in retirement
- D.Disability before age 65
Answer: B. A life annuity pays for life however long the annuitant lives, so it transfers longevity risk to the insurer.
2. A retiree wants payments for life but worries about dying soon after buying an annuity. Which option fits best?
- A.A 5-year term certain annuity
- B.A deferred annuity starting at age 90
- C.A straight life annuity
- D.A life annuity with a guarantee
Answer: D. A guarantee period (for example 10 years) continues payments to the beneficiary if the annuitant dies early, at a slightly lower income than straight life.
3. A joint and last survivor annuity pays:
- A.Until the second annuitant dies
- B.A lump sum paid at the second death
- C.Until the first annuitant dies
- D.For a fixed 20 years only
Answer: A. Payments continue as long as either annuitant is alive, often at a reduced rate after the first death if chosen.
4. Of these annuities bought with the same amount by a 65-year-old, which pays the highest monthly income?
- A.A joint and last survivor annuity
- B.An indexed life annuity
- C.A straight life annuity
- D.A life annuity with 15 years guaranteed
Answer: C. Straight life has no refund or guarantee and covers one life, so it gives the most income per dollar. Each added feature lowers the payment.
5. A prescribed annuity bought with non-registered money is attractive because:
- A.It defers all tax to death
- B.It can only be bought inside an RRSP
- C.Taxable interest is level each year
- D.All payments are tax-free
Answer: C. A prescribed annuity spreads the interest portion evenly over its term, so the taxable amount is the same each year instead of being higher early.
6. Payments from an annuity bought with RRSP money are:
- A.Fully taxable
- B.Tax-free
- C.Taxed as capital gains
- D.Taxable only on the interest
Answer: A. Registered money has never been taxed, so every payment from a registered annuity is income. Only the interest portion is taxed on non-registered annuities.
7. An impaired (enhanced) annuity pays more than a standard one because:
- A.It is held inside a TFSA
- B.The annuitant pays a higher premium for it
- C.It has a longer guarantee period
- D.The annuitant is expected to die sooner
Answer: D. A person with a serious health condition is expected to receive fewer payments, so the insurer can pay a higher income for the same premium.
8. An insured annuity strategy combines a life annuity with:
- A.A segregated fund with a reset feature
- B.Permanent life cover to replace capital
- C.A term policy for 10 years only
- D.A critical illness policy
Answer: B. The annuity gives high, secure income; part of it pays for permanent life insurance that replaces the capital at death for the heirs.
9. An RRSP must be converted to an income option by the end of the year the annuitant turns:
- A.75
- B.71
- C.65
- D.69
Answer: B. By December 31 of the year the holder turns 71, the RRSP must be collapsed, used to buy an annuity or transferred to a RRIF.
10. What is the main difference between an RRSP and a RRIF?
- A.An RRSP pays tax-free income
- B.An RRSP must be bought from an insurer
- C.A RRIF accepts new contributions
- D.A RRIF has yearly minimum withdrawals
Answer: D. A RRIF is a payout vehicle with a minimum withdrawal each year after the first; RRSP contributions are not allowed into it.
Practice all 16 annuities & registered plans questions, and the rest of the 200-question bank, in the free LLQP training sets. Questions you miss come back until you have mastered them.
Start practicingFree to start. No account needed.