She may choose to receive monthly payments for the rest of her life. You can tailor the income stream to suit your needs. *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. D)Dow Jones Industrial Average. B)variable annuities are classified as insurance products. who needs access to the sum invested at later time. D)money market funds. Question #43 of 48Question ID: 606809 A)II and IV. Future annuity payments will vary according to the separate account's performance. Question #40 of 48Question ID: 606800 A) Joint tenants annuity. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Your client owns a variable annuity contract with an AIR of 4%. When a variable contract is annuitized (distributed in regular payments, not as a lump sum), the number of accumulation units is multiplied by the unit value to arrive at the account's current value. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. During the accumulation phase, you make purchase payments. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. A) periodic payment immediate annuity. A) number of annuity units. Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. This compensation may impact how and where listings appear. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Registration with FINRA is de facto registration with the SEC; no registration is required by the state banking commission. Chapter 4: Annuities Flashcards | Chegg.com Simple and general annuities problems with solutions A) be paid to a designated beneficiary. 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. 's dividend yield was % last year. D) the payout plans provide the client income for life. However, they are protected by state guaranty associations in the event that the insurance company providing the product goes out of business. Her agent recommended she choose a variable annuity as a safe haven for the funds. D) II and IV. All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: C)III and IV. C) single payment immediate annuity. C)II and IV. Question #28 of 48Question ID: 606821 guarantees payments for a certain period of time. C) 100% tax free. D) an accounting measure used to determine the contract owner's interest in the separate account. If the customer takes a withdrawal of $10,000, what are the tax consequences? C) insurance companies keep variable annuity funds in separate accounts from other insurance products. Variable Annuities Flashcards - Cram.com Variable Annuities Flashcards | Quizlet There is a guaranteed minimum interest rate, normally amounting to between 1 and 3 percent. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. U.S. Securities and Exchange Commission. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. D) each annuity unit's value varies with time, but the number of annuity units is fixed. One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. A) Life-only annuity Portfolio Compliance Risk Analyst Job in Newark, NJ at Prudential *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. P=525p2+65,326p185,000E=326p+185,000P=-525 p^{2}+65,326 p-185,000 \quad E=-326 p+185,000P=525p2+65,326p185,000E=326p+185,000. Typically, they allow one withdrawal each year during the accumulation phase. D)II and III. *When money is deposited into the annuity, it is purchasing accumulation units. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. a variable annuity has which of the following characteristics Round to the nearest hundredth of a percentile. Chapter 12 - Variable Annuities Flashcards | Chegg.com An example would be if a life annuity with 10-year period certain contract holder died after 5 years, payments would continue for 5 more years to the beneficiary and then stop. The tax on this is $2,800 ($10,000 x 28%). Question #20 of 48Question ID: 606808 Determine whether the following events are independent or dependent. The remainder of the premium is invested in the separate account. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. In a variable life annuity with 10-year period certain, a contract holder receives: Your 55-year-old client invested $50,000 four years ago in a nonqualified variable annuity. III. A)defined contribution plans. While there is no guarantee on how investments in the separate account will perform, depending on its investment performance, the separate account could provide for a larger death benefit than the minimum guaranteed amount. He originally invested $29,000 4 years ago; it now has a value of $39,000. Determine the revenue equation given the profit and expense equations. 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. 11.1: Fundamentals of Annuities - Mathematics LibreTexts B) the state insurance department. Variable annuity salespeople must register with all of the following EXCEPT: A) I and III. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). Herpes Zoster has all of the following characteristics except: Group of answer choices. C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. The number of annuity units varies. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. A security is any investment for profit with management performed by a third party. A registered representative recommends a variable annuity with an income rider to a client. A)I and IV. Once annuitized, the number of annuity units does not vary. D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. C) each annuity unit's value and the number of annuity units vary with time. Question #32 of 48Question ID: 606815 && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. C) be returned to the separate account. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. B) I and IV. D) not suitable because a lifetime income rider is only for someone who is already retired. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. Reference: 12.3.3 in the License Exam. C) taxed as ordinary income only to the extent of earnings. Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. Variable annuities are riskier than fixed annuities because the underlying investments may lose value. C)II and III. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. A) I and II When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). D) a minimum of 10 years of variable payments, followed by additional variable payments for life A registered person recommends the purchase of a variable annuity to one of his clients. Contributions to a nonqualified variable annuity are not tax deductible. C)none of these. B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. Question #42 of 48Question ID: 606830 A demonstrated ability to quickly learn and continuously develop functional knowledge and an understanding of company products as well as administrative, claims, underwriting and marketing functions. . For a retired person, which of the following investments would provide the greatest protection against inflation? can be sold by someone with only an insurance license A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . C) II and IV *The customer, in the accumulation stage of the annuity, is holding accumulation units. *Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. The tax on this amount is $3,000. D)It cannot be determined until the April return is calculated. Paraplanner / Marketing Support Specialist Job in Austin, TX B) During the accumulation period. The value of the separate account is now $30,000. If the annuitant dies during the accumulation period, his/her beneficiary will receive the promised annuity payments. D) Variable annuity. D) The fact that periodic payments into the contract may increase or decrease. A) two people are covered and payments continue until the second death. IBM hiring Senior Practitioner- Policy Admin in Noida, Uttar Pradesh When the first party dies, the annuity payment is made to the survivor. B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually D) None, because it is the proceeds from a life insurance company. D)partially a tax-free return of capital and partially taxable. D) Growth mutual funds. D) Capital gains tax on earnings exceeding basis. vote for the investment adviser. This recommendation is: A) II and III. A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. 2019 Ted Fund Donors If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? Question #16 of 48Question ID: 606807 A) mortality guarantee.
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