LLQP Exam Dumps : Life License Qualification Program (LLQP)

Anaccumulation annuityallows Garry tosave and grow his investmentsover the next 10 years withdeferred paymentsstarting at retirement, matching his timeline and retirement goals.

Exact Extract:

"An accumulation annuity is used to accumulate savings over time. Payments commence at a later date specified by the investor (deferred payments)."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 3.2.1.2 Accumulation Annuity​)

Upon retirement, funds from a Deferred Profit Sharing Plan (DPSP) can be transferred on a tax-deferred basis to certain registered accounts, such as a Locked-In Retirement Account (LIRA). This option allows Aadi to defer taxes while preserving the funds for future retirement income. LLQP guidelines indicate that DPSP funds can be transferred to a LIRA or similar locked-in accounts under the tax-deferred status until they are eventually converted into income-paying vehicles, like a Life Income Fund (LIF) or a Registered Retirement Income Fund (RRIF)​​.

Options such as a TFSA or group RRIF are incorrect in this context because TFSAs do not permit direct DPSP transfers and RRIFs are typically used as income-producing accounts rather than transfer vehicles. A LIRA is specifically designed to hold locked-in funds from employer pension plans, allowing Aadi to keep the funds tax-sheltered until he needs to draw income from them during retirement.

Comprehensive and Detailed Explanation From Exact Extract:

Capital gains = FMV $400,000 – ACB $200,000 = $200,000.

Taxable portion = 50% × $200,000 = $100,000.

At a 50% tax rate, the total tax liability = $50,000.

However, life insurance to cover the taxable gain is often chosen at the full $100,000 to ensure coverage in case of future value growth or policy structure flexibility.