Under the LLQP Segregated Funds and Annuities curriculum, Lydia’s objectives clearly combine capital protection, growth potential, and estate planning considerations. She does not require income from the funds, wishes to preserve capital for her grandchildren, and wants the ability to lock in market gains over time. These criteria align most closely with segregated funds that include a reset feature.
Segregated funds are insurance-based investment products that provide market exposure while offering guarantees at maturity and upon death, typically at 75% or 100% of deposits (less withdrawals). This makes them particularly suitable for investors like Lydia who want to protect capital intended for heirs, even if markets decline before death. The LLQP study guide emphasizes that death benefit guarantees are a key advantage of segregated funds for estate planning, as they ensure a minimum payout regardless of market performance.
The reset feature is especially important in this scenario. A reset allows the contract owner to periodically “lock in” investment gains by resetting the guaranteed amount to the current market value. If markets perform well, Lydia can reset the guarantee, thereby increasing the protected amount for her beneficiaries. This directly meets her desire to capture long-term growth while safeguarding those gains against future downturns.
The other options do not meet all of Lydia’s requirements. A variable income annuity is designed to provide income, which Lydia does not need, and it does not allow access to capital for estate growth purposes. Index-based ETFs offer growth potential but provide no capital protection or guarantees. Market-linked GICs protect principal but typically cap upside growth and do not offer death benefit guarantees or the ability to reset guarantees over time.
The LLQP curriculum highlights segregated funds with reset features as an ideal solution for older investors with estate planning goals who want growth with downside protection. Therefore, the most appropriate investment for Lydia is segregated funds with a reset feature, making Option D the correct and fully verified answer.
