a variable annuity has which of the following characteristicsa variable annuity has which of the following characteristics

Variable Annuities Flashcards - Cram.com Distribution of dividends occurs during the accumulation period. A Variable Annuity Has Which of the Following Characteristics Which of the following recommendations would best meet the customer profile? These contracts come with high surrender charges. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? A registered representative recommends a variable annuity with an income rider to a client. Of the 4 client profiles below, which might be the best suited for a variable annuity recommendation? C) 100% tax free. B) II and IV. B) During the accumulation period. Ted's Bio; Fact Sheet; Hoja Informativa Del Ted Fund; Ted Fund Board 2021-22; 2021 Ted Fund Donors; Ted Fund Donors Over the Years. The number of annuity units is fixed at the time of annuitization. If this client is in the payout phase, how would his April payment compare to his March payment? B)cost of living. I. A)the number of annuity units becomes fixed when the contract is annuitized. A) 2800. C) Unit refund life option All of the following are characteristics of a variable annuity, except: a. D) be paid to the issuing company to complete the plan. A 10% penalty applies only if distributions begin before age 59-. C. \text{Salaries:} && \text{Deductions:}\\ "Variable Annuities: What You Should Know," Page 6. Variable annuity Which of the following is characteristic of fixed annuities? The fixed payment that the annuitant receives loses purchasing power over time as a result of inflation. 7 - Annuities Flashcards | Quizlet The nature of the securities invested in-bonds and growth stocks-makes it necessary that sales representatives and their principals be licensed in securities as well as insurance. a variable annuity does not guarantee an earnings rate of return. Annuities are similar to other forms of investing in that the owner invests money with the hope that it will gain in value, but annuities also come with higher fees than most mutual funds. Annuities are complicated products, so that may be easier said than done. A) Age 56, available cash to invest, makes the maximum retirement plan contributions to an existing IRA and 401(k) plan Surrender fees and penalties for early withdrawal. C)number of accumulation units. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Practice all cards. B)value of annuity units. This recommendation is: A customer has an investment objective of keeping pace with inflation while assuming moderate risk. D) cost of living. A) The fact that the annuity payment may increase or decrease. When may a variable annuity account be surrendered? None of the other investments listed here offer tax-deferred growth. a variable annuity guarantees an earnings rate of return. How Good of a Deal Is an Indexed Annuity? Sub accounts and mutual funds are conceptually identical, but sub accounts don't have ticker symbols that investors can easily type into a fund tracker for research purposes. IV. Once the contract is annuitized, monthly payments to the customer are: He makes the following four statements, all of which are true EXCEPT 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. Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but theres also a risk that the account will fall in value. B)corporate stock. Lifetime vs. fixed period annuities If the customer takes a withdrawal of $10,000, what are the tax consequences? C) Universal variable life policy. B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. A) I and II B) The entire $10,000 is taxable as ordinary income. Reference: 12.1.4.2 in the License Exam. *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. C) II and IV. B)Variable annuities. B)Life annuity with period certain. Given that all of the current retirement investments are subject to market risk, the customer wants these new funds to have no market risk exposure. The LATF-adopted ILVA Actuarial Guideline has an effective date of July 1, 2024 for contracts, riders or endorsements issued on or after that date. D) Variable annuities. Distributions to the annuitant will fluctuate during the payout period. Fixed annuities. B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. 222. Periodic payment deferred annuity. B) value of annuity units. A)a lifetime withdrawal benefit (LWB) or lifetime income benefit is generally in the form of a rider attached to the contract which will come at a cost to the annuitant C) Corporate bonds. D) I and II. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. No, annuities are not FDIC-insured as they are not bank products. C) Mutual fund portfolio consisting of blue chip stocks \end{array} C)Variable annuity contract with a discussion regarding interest rate risk A prospectus for a variable annuity contract: B) It will be lower. A) A variable annuity a) What percentage of Facebook's users are from the United States? Determine the revenue equation given the profit and expense equations. *Contributions to a nonqualified variable annuity are not tax deductible. How to Rollover a Variable Annuity Into an IRA. C)complete all paper work to purchase the annuity contract and obtain the clients signature immediately. B) variable annuities. Her agent recommended she choose a variable annuity as a safe haven for the funds. The remainder of the premium is invested in the separate account. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed D) III and IV. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Sas#8-psy 002 - Organizational Behavior D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. A)I and IV. 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 variable annuity has which of the following characteristics 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. C) III and IV. B) The entire $10,000 is taxable as ordinary income. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. D)Municipal bonds. Similarly, CDs are insured, thereby eliminating risk and guaranteeing a return. Which of the following is NOT associated with characteristics of shares A)II and IV. All of the following are characteristics of variable annuity contracts Distribution can take place before or during any solicitation for sale. . A variable annuity's separate account is: As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. D) None, because it is the proceeds from a life insurance company. *During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. In a variable life annuity with 10-year period certain, a contract holder receives: Distribution can take place before or during any solicitation for sale. C) It will stay the same. 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. *The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. B) variable annuities are classified as insurance products. B)II and III. A) Joint tenants annuity. Because they have a separate account in which the investor assumes the investment risk, they can only be sold by individuals with both insurance and securities licenses. Full-Time. C) The portion of the premium invested in the insurance company's general account is used to provide for the minimum guaranteed amount of the death benefit. *This annuity is nonqualified, which means the client has paid for it with after-tax dollars and has a basis equal to the original $29,000 investment. Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. Your client has a large sum of money to invest from the proceeds of the sale of his home. Carefully look at your options when choosing an annuity. If in the following year, the S&P 500 declined by 5%, the annuities value would remain at $107,000 because gains are locked in each year. This guideline has been prepared for use by Federal agencies. Which of the following is not characteristic of a fixed annuity? A) The policy provides a minimum guaranteed death benefit. B) During the accumulation period. Rolling two 222s followed by one 666 on three tosses of a fair die, Use the table 1 and table 2 to complete the table 3 All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. C) 10 years of variable payments. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. 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. A)IPO. 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 dissolutions of the trust for distributing income and capital gains. Expert Answer. IBM hiring Practitioner- Policy Admin in Noida, Uttar Pradesh, India B) Life annuity with period certain Herpes Zoster has all of the following characteristics except: 11.1: Fundamentals of Annuities - Mathematics LibreTexts A) I and III. Each of the remaining statements are true. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. D)II and IV. have investment risk that is assumed by the investor B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ How is the distribution taxed? What is the annual cash flow generated from the new machine? The separate account is used for both variable life insurance and variable annuity investments. A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. A variable annuity is a security and must be registered with the SEC, not FINRA. Variable annuities grow tax-deferred, so you dont have to pay taxes on any investment gains until you begin receiving income or make a withdrawal. Based only on these facts, the variable annuity recommendation is These contracts cover both lives and will continue to make payments until the last spouse dies. C)Corporate bonds. Income that cannot be outlived by the owner C) II and III. Your 65-year-old client owns a nonqualified variable annuity. 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. Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies. A)2800. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. This annuity is nonqualified, which means the client has paid for it with after-tax dollars and has a basis equal to the original $29,000 investment. U.S. Securities and Exchange Commission. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. A)exempt from taxes The investor has already paid tax on the contributions but the earnings have grown tax-deferred. The value of accumulation and annuity units varies with the investment performance of the separate account. Which 2 of the 4 client profiles would a VA be LEAST suitable for? D) 4200. Upon John's death during the accumulation period, Sue takes a lump-sum payment. Therefore, ordinary income taxes will apply to the entire $10,000. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. A) A 75 year old women, who is a former executive retired for over ten years who wants to preserve as much capital as she can to leave to her two grandchildren. During the accumulation phase, the number of accumulation units will increase as additional money is invested. The tax on this is $2,800 ($10,000 x 28%). On any device & OS. b. All of the following statements about variable annuities are true EXCEPT: Annuity units are units of ownership when the contract is in the payout stage. A)II and III. They are more suitable for individuals who can fund the annuity with cash, want to supplement existing retirement benefits they have already funded, are comfortable with the market risk associated with a VA separate account portfolio and anticipate a long retirement. How does an indexed annuity differ from a fixed annuity? I. A) a minimum rate of return is guaranteed. While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. During payout, distributions will fluctuate due to performance in the separate account. a variable annuity has which of the following characteristics When the annuitization option is selected, each payment represents both capital and earnings. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. A) variable payments for 10 years, followed by fixed payments for life. An annuity is an agreement for one person or organization to pay another a series of payments. Question #36 of 48Question ID: 606805 A)There is no tax as the withdrawal is considered return of capital. The tax on this amount is $3,000. Fixed annuities, on the other hand, provide a guaranteed return. Solved The following are characteristics of a public | Chegg.com C)100% tax deferred. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. D)variable annuities. A Variable Annuity Has Which of the Following Characteristics Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. This describes which of the following annuities? The AG49-A Revisions Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. This makes a total of $4,000 tax and penalty paid on the random withdrawal. *When money is deposited into the annuity, it is purchasing accumulation units. III. C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. A customer has a nonqualified variable annuity. Reference: 12.2.1 in the License Exam. B)Universal variable life policy. A 3 Every annuity has some characteristics in common. *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. Which of the following statements regarding variable annuities are TRUE? The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. How Are Nonqualified Variable Annuities Taxed? Reference: 12.3.2.1 in the License Exam. Your customer, still working, informs you that she will be funding a variable annuity you have recommended from 2 sources: a refinancing of her primary home where she will be able to draw out equity that has built up since it was purchased 15 years ago, and cashing out another variable annuity that she recently purchased within the past 2 years without a lifetime income rider like the one you have recommended. D) not suitable because a lifetime income rider is only for someone who is already retired. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. D) a minimum of 10 years of variable payments, followed by additional variable payments for life D) tax free. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. The following changes have been incorporated into Special Publication 800145, as of the date indicated - . Her agent recommended she choose a variable annuity as a safe haven for the funds. *A variable annuity may only be surrendered during the accumulation period. A) 2800. C)annuity units. The growth portion is taxed as ordinary income. savingsbonds30,420Groupinsurance45,630$341,718\begin{array}{lrlr} The value of the separate account is now $30,000. Universal variable life policies 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. Question #31 of 48Question ID: 606836 C)Keogh plans. MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. B) Corporate debt securities D) I and IV. It may be used by nongovernmental . Your client owns a variable annuity contract with an AIR of 4%. Which of the following statements is not true about the characteristics of a trend? D) Age 27, saving for first home. Reference: 12.1.2 in the License Exam. A) a minimum rate of return is guaranteed. *Variable annuity contracts were devised to help investors keep pace with inflation. B) the client may vote for the board of directors or board of managers. When the annuitization option is selected, each payment represents both capital and earnings. Question #29 of 48Question ID: 606831 Are Variable Annuities Subject to Required Minimum Distributions? This factor is used to establish the dollar amount of the first annuity payment. D)Dow Jones Industrial Average. B)suitable regardless of funding sources Your client owns a variable annuity contract with an AIR of 4%. B)I and IV. Once a variable annuity has been annuitized: D)Investment risk. *The customer, in the accumulation stage of the annuity, is holding accumulation units. Future annuity payments will vary according to the separate account's performance. D)I and IV, Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. B) The death benefit cannot ever be more than the guaranteed benefit. *Variable annuity contracts must be sold by prospectus due to the characterization of the separate accounts as securities, which must be registered under the Securities Act of 1933 and the Investment Company Act of 1940. The paper publication will not be rereleased. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually C)II and IV. The largest monthly check an annuitant can receive for the rest of his life is generated by a straight life (life income or life only) payout option. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. Reference: 12.3.3 in the License Exam. He makes several statements regarding the contract. B) I and II. They offer broad diversification in the securities market and potential growth, all while using the power of tax deferral. A Variable Annuity has which of the following characteristics? a life insurance holder dies sooner than expected. B)IRAs. \hspace{10pt} Federal unemployment (employer only), 0.8%0.8\%0.8%. Reference: 12.3.2.4 in the License Exam. You have 4 clients each expressing interest in a variable annuity contract. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? An investor owning which of the following variable annuity contracts would hold accumulation units? 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 For a retired person, which of the following investments would provide the greatest protection against inflation? Variable Annuities | Investor.gov Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. 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 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition C) taxed as ordinary income only to the extent of earnings. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. Therefore, variable annuities must be registered with the state insurance commission and the Securities and Exchange Commission. C) suitable regardless of funding sources A) It will be higher. IV. \hspace{7pt} a. December 303030, to record the payroll. D) an accounting measure used to determine the contract owner's interest in the separate account. The funds in an annuity are off-limits to creditors and other debt collectors. When money is deposited into the annuity, it is purchasing accumulation units. Annuities due are a type of annuity where payments are made at the beginning of each payment period. Post navigation D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. What are the characteristics of fixed annuities? - InsuranceQnA Senior Customer Care Advocate Annuities ($22 per hour) in Warwick B) payments continue until the death of the primary owner. The entire amount is taxed as ordinary income. These contracts come with high surrender charges. Reference: 12.3.1 in the License Exam. B) The investor's marital status. B)I and III. D)I and III. Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return. However, the web version (cat. the agent must be licensed in both insurance and securities. B)Fixed annuity contract with a discussion regarding timing risk What Are the Risks of Annuities in a Recession? A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. And, unlike a fixed annuity, variable annuities do not provide any guarantee that you will earn a return on your investment. Distributions from nonqualified variable annuities are: B) be paid to any legal heirs as recognized by the annuitant's state of domicile. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. The number of accumulation units can rise during the accumulation period. "Variable Annuities: What You Should Know," Page 10. C)II and IV. B) fixed payments for 10 years, followed by variable payments for life. A) I and II. D) II and IV. A)number of annuity units. FINRA. C)I and IV. Financial Sales Professional Job in Fort Worth, TX at New York Life Question #26 of 48Question ID: 606811 All of the following statements regarding variable annuities are true EXCEPT: 6102..55.001) is being updated on an ongoing basis. Prudential Retirement Security Annuity VI is a group variable annuity (GVA) issued by Prudential Retirement Insurance and Annuity Company (PRIAC) which utilizes a Separate Account offered The growth portion is subject to a 10% penalty. Question #20 of 48Question ID: 606808 Reference: 12.1.2 in the License Exam. Reference: 12.3.3 in the License Exam. Variable annuities are designed to combat inflation risk. order now. Simple and general annuities problems with solutions B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) A trend makes considerable influence or impact. Complete a blank sample electronically to save yourself time and money. The growth portion is taxed as ordinary income. All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: A. The income was deferred from tax over the plan's life, so it is taxable as ordinary income once distributed. D)the state insurance department. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. who needs access to the sum invested at later time. e) Are From the United States and Log on every day independently? If a 42-year-old customer has been depositing money in a variable annuity for 5 years, and he plans to stop investing but has no intention of withdrawing any funds for at least 20 years, he is holding: B) variable annuities. A variable annuity's separate account is: A separate account will invest in a number of different securities. The accumulation period of a variable annuity may continue for many years. Question #46 of 48Question ID: 606796 The payout compared to last month's payout.
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