Life annuity has the largest payout because less risk is assumed by the insurance company; there is no beneficiary in the event the annuitant dies. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. A variable annuity is a long term investment issued by an insurance company that can help you grow your money, take income in retirement and pass on your wealth. D) expense guarantee. Question #15 of 48Question ID: 606804 The holder of a variable annuity receives the largest monthly payments under which of the following payout options? A) 4000. B)a majority vote from the shareholders is required to change the investment objectives. Once the contract is annuitized, monthly payments to the customer are: MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). He makes several statements regarding the contract. The investor purchased accumulation units. D)Investment risk. The client agrees to purchase the contract and informs the RR that he will be cashing out a VA he purchased 2 years ago to fund the new contract and will forward the check as soon as he receives it. a variable annuity guarantees an earnings rate of return. Round to the nearest hundredth of a percentile. \hspace{10pt} Social security, 6%6\%6% on first $100,000\$100,000$100,000 of employee annual earnings A universal variable life policy should be purchased primarily for its insurance features, not its investment features. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. The separate account performance compared to last month's performance. In this case, the investor is taking a lump-sum distribution before reaching age 59- and must pay an additional 10% penalty on the taxable amount. Which of the following are defined as securities? Reference: 12.1.1 in the License Exam. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. D)I and III. The tax on this amount is $3,000. All of the following characteristics are shared by both a mutual fund and a variable annuity's separate account EXCEPT: Cashing out life insurance policies or VAs where steep surrender charges are likely to exist, particularly in the earlier years of those contracts, is also considered abusive. This makes a total of $4,000 tax and penalty paid on the random withdrawal. However, if you take a withdrawal during the contractssurrender period, which can be as long as 15 years, youll generally have to pay a surrender fee. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. A 3 A) mutual fund units. In March, the actual net return to the separate account was 8%. national origin, genetics, disability, age, veteran status, or any other characteristic protected by law. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. D) variable annuities may only be sold by registered representatives. D)suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract, Based on the information given in the question, the VA recommendation would not be suitable. There are also immediate annuities, which begin paying income right away. For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. A)2800. B) The entire $10,000 is taxable as ordinary income. && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ D) A 50 year old individual with $50,000 cash to invest who has already made the maximum contributions to an IRA and the 401(k) plan at his place of employment and would like to minimize some of the tax consequences of his currently high tax bracket. the agent must be licensed in both insurance and securities. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Variable annuity Which of the following is characteristic of fixed annuities? a. \hspace{7pt} a. December 303030, to record the payroll. If a customer is about to buy a variable annuity contract and wants to select an annuity with a payout option providing the largest possible monthly payment, which of the following payout options would be most suitable? A)II and III. When the first party dies, the annuity payment is made to the survivor. A) A variable annuity C) Age 40, currently unemployed A variable annuity is a long term investment issued by an insurance company that can help you grow your money, take income in retirement and pass on your wealth. C)II and IV. A) The policy provides a minimum guaranteed death benefit. D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. Her intent was to use the funds for the down payment on a house after graduation. C)none of these. Life with period certain will produce a smaller check for life because the insurance company will guarantee payments to a beneficiary for a certain period of time designated in the contract should the annuitant die within that period. D)each annuity unit's value is fixed, but the number of annuity units varies with time. D)variable annuities offer the investor protection against capital loss. Home; About. The number of accumulation units can rise during the accumulation period. A variable annuity is a type of annuity contract the value of which can vary based on the performance of an underlying portfolio of sub accounts. \end{array} B) single payment deferred annuity. If your 60-year-old customer purchases a nonqualified variable annuity and withdraws some of her funds before the contract is annuitized, what are the consequences of this action? A) The fact that the annuity payment may increase or decrease. Annuity units are units of ownership when the contract is in the payout stage. Your customer is interested in a variable annuity but is unclear on some of the details regarding different specifications and riders that can be attached to the contract. C) Mutual fund portfolio consisting of blue chip stocks C) Corporate bonds. How does an indexed annuity differ from a fixed annuity? If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? Question #11 of 48Question ID: 606816 C) II and III. D) accumulation shares. Here is how guaranteed lifetime annuities work. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Question #14 of 48Question ID: 606823 B)Capital gains taxation on the earnings withdrawn in excess of the owner's basis. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. B) the rate of return is determined by the underlying portfolio's value. Annuity death benefits are generally paid in a lump sum. D)money market funds. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. Which of the following is not a characteristic of a program module? A fixed annuity is an insurance contract that pays a guaranteed rate of interest on the owner's contributions and later provides a guaranteed income. C) II and IV. A)defined contribution plans. Describe. II) It has an internal capital market wherein each division competes for funds. Question #26 of 48Question ID: 606811 *A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. Lifetime vs. fixed period annuities When the annuitization option is selected, each payment represents both capital and earnings. B)fixed in value until the holder retires.
Hire Velocity hiring Customer Escalation Agent in Tampa, Florida vote on proposed changes in investment policy. D)suitable due to the relative safety of the investment. A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of sub accounts. A variable annuity is both an insurance and a securities product.
Frequently Asked Questions Anti-Money Laundering Program and Suspicious This would not align with the couple's criteria for coverage as long as they both live. If you need to withdraw money from the account because of a financial emergency, you may face surrender fees. A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. Reference: 12.3.4 in the License Exam, Chapter 16: U.S. Government and State Rules a, Chapter 17: Other SEC and SRO Rules and Regul, Chapter 15: Ethics, Recommendations, and Taxa, Chapter 13: Direct Participation Programs, Fundamentals of Financial Management, Concise Edition, Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik, Carl Warren, James M Reeve, Jonathan E. Duchac. When the second party dies, all payments cease. A)Fixed annuities. C) value of underlying securities held in the separate account. The accumulation unit's value is used to calculate the total value of the account. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. Question #35 of 48Question ID: 606810 A) 2800. D)Municipal bonds. C)It will be higher. *Contributions to a nonqualified variable annuity are not tax deductible. Annuities are complicated products, so that may be easier said than done. A client has purchased a nonqualified variable annuity from a commercial insurance company. Vaccine has decreased the incidence. *Annuity death benefits are generally paid in a lump sum. U.S. Securities and Exchange Commission. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? B) 100% taxable. As with all tax-deferred accounts, municipal bonds are not appropriate investments because interest earned on municipals is already tax exempt at the federal level. Which of the following is characteristic of variable annuities? The trial of the assassins commenced on the following day; and the evidence being so clear, they were both found guilty, and condemned, to be broken alive on the wheel. D)an accounting measure used to determine payments to the owner of the variable annuity.
Chapter 7: Annuities Flashcards | Quizlet 6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Dec 2005 The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children Only variable annuities have payout plans that provide the client income for life.
Paraplanner / Marketing Support Specialist Job in Austin, TX The following information about the payroll for the week ended December 303030 was obtained from the records of Vienna Co.: Salaries:Deductions:Salessalaries$670,000Incometaxwithheld$198,744Warehousesalaries110,000Socialsecuritytaxwithheld51,714Officesalaries234,000Medicaretaxwithheld15,210$1,014,000U.S.
Herpes Zoster has all of the following characteristics except: You have 4 clients each expressing interest in a variable annuity contract. D)I and III. B) II and IV. The separate account is used for both variable life insurance and variable annuity investments. D) the payout plans provide the client income for life. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. D) II and IV. Annuities due are a type of annuity where payments are made at the beginning of each payment period. How Are Nonqualified Variable Annuities Taxed? Indexed annuity owners receive credited interest tied to the fluctuations of the linked index An immediate annuity consists of a single premium An immediate annuity has a single premium. Based on this information the RR should: The paper publication will not be rereleased. D) cost of living. Based on this information the RR should: If this client is in the payout phase, how would his April payment compare to his March payment? Typically, they allow one withdrawal each year during the accumulation phase. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur.
Get the free Learn About Annuities and Their Myths - F&G . When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). The value of an annuity unit varies from month to month according to the performance of the separate account in comparison to the assumed interest rate. C)Corporate bonds. All of the following are true about annuities EXCEPT: they have all the same characteristics as life insurance. The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. C) The insurance company. You can learn more about the standards we follow in producing accurate, unbiased content in our. With regard to a variable annuity, all of the following may vary EXCEPT: A) I and II Essential Characteristics:
Financial Sales Professional Job in Fort Worth, TX at New York Life a variable annuity does not guarantee an earnings rate of return. Her agent recommended she choose a variable annuity as a safe haven for the funds. Income that cannot be outlived by the owner The owner of a variable annuity has all of the following rights EXCEPT the right to vote: a. for the board of trustees b. to change the separate account's investment objective c. for distributing income and capital gains d. for dissolution of the trust c. for distributing income and capital gains. Future annuity payments will vary according to the separate account's performance. If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? A) 2800. II. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. As the name implies, the investment performance of a variable annuity's portfolio (separate account) can vary, and the investor bears the risk of any potential decline in its value. While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. This describes which of the following annuities? The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. This compensation may impact how and where listings appear. A 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition
Variable Annuity: Definition and How It Works, Vs. Fixed Annuity Reference: 12.1.2.1.1 in the License Exam. Carefully look at your options when choosing an annuity. *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. What Are the Risks of Annuities in a Recession? B)a minimum rate of return is guaranteed. EEO IS THE LAW . C) Unit refund life option A)the state banking commission. A) Fixed annuities. C) I and IV. Every annuity has some characteristics in common. Premiums made into the annuity purchase accumulation units. *Only variable annuities have payout plans that provide the client income for life. B)I and IV. B)part earnings and part cost basis B)each annuity unit's value varies with time, but the number of annuity units is fixed. D) the number of annuity units becomes fixed when the contract is annuitized. CDs insured by the FDIC. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Reference: 12.2.1 in the License Exam. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract This customer has no spouse or dependents, which negates the value of the death benefit. D) A 50 year old individual with $50,000 cash to invest who has already made the maximum contributions to an IRA and the 401(k) plan at his place of employment and would like to minimize some of the tax consequences of his currently high tax bracket. A joint life with last survivor annuity: Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. On any device & OS. C) III and IV. C) value of underlying securities held in the separate account. D) value of accumulation units. Question #25 of 48Question ID: 606819 The anti-money laundering rules for insurance companies highlight that each insurance company - like other financial institutions subject to anti-money laundering program requirements - must develop a risk-based anti-money laundering program that identifies, assesses, and mitigates any risks of money laundering, terrorist financing, and other Reference: 12.1.2 in the License Exam. D) an accounting measure used to determine the contract owner's interest in the separate account. I. Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. She will receive the annuity's entire value in a lump-sum payment. B) IPO. To comply with Regulation SP, a brokerage firm is required to do all of the following EXCEPT: A) deliver an annual notice of its information collecting and sharing policies to all customers. Dividing the funds available so as to fund 2 separate contracts, whether they be joint with last survivor or life income, would not be cost efficient for spouses. A life with period certain contract guarantees payments for a specified number of years to a named beneficiary if the annuitant dies during that time. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. Herpes Zoster has all of the following characteristics except: Group of answer choices. D)I and III. "Variable Annuities: What You Should Know," Page 3. B) Life annuity. A) I and III. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. All of the following statements concerning a variable annuity are correct EXCEPT: The number of accumulation units can rise during the accumulation period. Uses in Investing, Pros, and Cons, Indexed Annuity: Definition, How It Works, Yields, and Caps. During payout, distributions will fluctuate due to performance in the separate account.
Solved 6. Which of the following is not a characteristic of | Chegg.com Distribution can take place before or during any solicitation for sale. Question #18 of 48Question ID: 606827 The value of the separate account is now $30,000. The investor has already paid tax on the contributions but the earnings have grown tax-deferred. The growth portion is taxed as a capital gain. Practice all cards. U.S. Securities and Exchange Commission. All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. The growth portion is taxed as ordinary income. C) II and IV A) Joint tenants annuity. Life annuity has the largest payout because less risk is assumed by the insurance company; there is no beneficiary in the event the annuitant dies. A) two people are covered and payments continue until the second death. However, they are protected by state guaranty associations in the event that the insurance company providing the product goes out of business. B)Universal variable life policy. III.
What are the characteristics of fixed annuities? - InsuranceQnA PDF The NIST definition of cloud computing Bear in mind that between the numerous feessuch as investment management fees,mortality fees, and administrative feesand charges for any additional riders, a variable annuitysexpenses can quickly add up. Question #27 of 48Question ID: 606818 *With guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is not guaranteed because payments stop when the annuitant has received an amount equal to the principal account value or the contract term ends. B) allow customers to opt out of sharing of financial information with certain nonaffiliated firms. C) 10 years of variable payments. A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. B)I and IV. Reference: 12.3.3 in the License Exam. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 This guideline has been prepared for use by Federal agencies. 8 annuities provide a guaranteed rate of return, whereas annuities provide conservative to aggressive investments whose rates of return are not guaranteed. C) II and III. All of the following are characteristics of Variable Annuity contracts EXCEPT The possibility of higher returns and greater income than fixed annuities, but there's also a risk that the account will fall in value A There are no surrender fees B Guaranteed death benefit C Tax deferred growth D Training Explanations C) The ordinary income on the proceeds over the cost basis plus 10% of the net gain (if any) if Sue is younger than 59- years old. can be sold by someone with only an insurance license The time period depends on how often the income is to be paid. The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation.
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