B) fixed in value until the holder retires. C) During the annuity period. B) During the accumulation period. 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. covers more than one person. In March, the actual net return to the separate account was 8%. D) Keogh plans. A) The fact that the annuity payment may increase or decrease. D) the number of annuity units becomes fixed when the contract is annuitized. If the customer takes a withdrawal of $10,000, what are the tax consequences? Single payment deferred annuity. Reference: 12.1.4.1 in the License Exam. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. They can be classified by: Nature of the underlying investment - fixed or variable 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. *Of the four customer profiles the individual already making the maximum retirement account contributions available to him and wanting to minimize the tax consequences of being in a high income tax bracket would be most suitable for a VA recommendation. A) a variable annuity contract will provide a fluctuating monthly check upon the annuitization of the contract The Three Main Types of Annuity Insurance - Fixed, Variable, and Equity Annuity units are units of ownership when the contract is in the payout stage. c) Construct a contingency table showing all the joint and marginal probabilities. C) such an annuity is designed to combat inflation risk. A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. The number of annuity units varies. D) variable annuities may only be sold by registered representatives. C)I and III. D)the state insurance department. Your client owns a variable annuity contract with an AIR of 4%. a variable annuity does not guarantee payments for life. A) I and III. B)Life annuity with period certain. Reference: 12.2.1 in the License Exam. U.S. Securities and Exchange Commission. Question #27 of 48Question ID: 606818 5 Q All of the following are characteristics of variable whole life EXCEPT the premium is level there is no guaranteed cash value there is no guaranteed minimum death benefit. D)0. B)II and III. Lifetime vs. fixed period annuities U.S. Securities and Exchange Commission. A customer has a nonqualified variable annuity. Which of the following is characteristic of variable annuities? Surrender fees and penalties for early withdrawal. savingsbondsGroupinsurance$198,74451,71415,21030,42045,630$341,718, Tax rates assumed: B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. B) life income C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed Science Health Science Nursing. B) the rate of return is determined by the underlying portfolio's value. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract This describes which of the following annuities? The separate account performance compared to an assumed interest rate. 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. An individual retirement annuity is an investment vehiclesimilar to an individual retirement accountthat is offered by insurance companies. A joint life with last survivor annuity: Variable annuities are designed to combat inflation risk. 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 DR:BASSANT ADEL 9 QUIZ CH 6 Choose the correct answer: 1-Insurance policy benefits are classified on an insurance company's balance sheet as A. liabilities, because the insurance company may have to pay out the benefits B. assets, because policy benefits are valuable to the company C. liabilities, because customers may fall behind on their premium payments D. assets, because policy benefits . A)2800. Explain what is meant by positive and negative Sample problems from Chapter 9 . *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. Reference: 12.2.1 in the License Exam. When the first party dies, the annuity payment is made to the survivor. Hire Velocity hiring Customer Escalation Agent in Tampa, Florida b. Which of the following statements regarding variable annuities are TRUE? Determine the revenue equation given the profit and expense equations. 6102..55.001) is being updated on an ongoing basis. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. VAs, blue chip mutual fund portfolios, ETFs and ETNs are all tied to market performance in some way and have risk characteristics that would not align in terms of suitability for this client. A) A variable annuity How is the distribution taxed? However, it does guarantee payments for life (mortality). Annuities basics | III *Variable annuity contracts were devised to help investors keep pace with inflation. must provide full and fair disclosure. C)Variable annuity contract with a discussion regarding interest rate risk must precede every sales presentation. D) not suitable because a lifetime income rider is only for someone who is already retired. The number of annuity units is fixed. Chapter 4: Annuities Flashcards | Chegg.com This would not align with the couple's criteria for coverage as long as they both live. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: must precede every sales presentation. "Variable Annuities: What You Should Know," Page 6. III. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. A) A variable annuity It is innate and universal. D) I and IV. 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. D) The investment risk is shared between the insurance company and the policyowner. B) the state insurance department. 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. Reference: 12.1.4.2 in the License Exam. IBM hiring Senior Practitioner- Policy Admin in Noida, Uttar Pradesh C) A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. IBM Noida, Uttar Pradesh, India1 month agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. D)the safety of the principal invested. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. Reference: 12.1.2.1.1 in the License Exam. a life insurance holder lives longer than expected. Your client has a large sum of money to invest from the proceeds of the sale of his home. In a variable life annuity with 10-year period certain, a contract holder receives: For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. used to escrow late or otherwise delinquent premium payments. She will receive the annuity's entire value in a lump-sum payment. Do homework Doing homework can help you learn and understand the material covered in class. 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. And, unlike a fixed annuity, variable annuities do not provide any guarantee that you will earn a return on your investment. B)Fixed annuity contract with a discussion regarding timing risk A 60-year-old individual, nearing retirement who has both IRAs and a 401k in place, is comfortable with market risk associated with the stock market, and has a lump sum in cash available to fund the annuity A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic pay- ments to you, beginning either immediately or at some future date. Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. D)II and III. Solved 6. Which of the following is not a characteristic of | Chegg.com When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Can I Borrow from My Annuity for a House Down Payment? Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Investopedia requires writers to use primary sources to support their work. You can learn more about the standards we follow in producing accurate, unbiased content in our. 111. Variable annuity Which of the following is characteristic of fixed annuities? The accumulation unit's value is used to calculate the total value of the account. required to be located off of the company's premises. The number of accumulation units can rise during the accumulation period. D) I and III. D) the payout plans provide the client income for life. What is the annual cash flow generated from the new machine? D) a minimum of 10 years of variable payments, followed by additional variable payments for life The number of annuity units is fixed at the time of annuitization. Variable Annuities | Investor.gov An annuity is an insurance product that promises to pay out income at a future date based on invested funds. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. B) accumulation units. \hspace{10pt} \text{Office salaries} & \underline{234,000} & \hspace{10pt} \text{Medicare tax withheld} & 15,210\\ who needs access to the sum invested at later time. The separate account is used for both variable life insurance and variable annuity investments. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? D) be paid to the issuing company to complete the plan. When the annuitization option is selected, each payment represents both capital and earnings. A)II and IV. B) single payment deferred annuity. 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. *The investor has already paid tax on the contributions but the earnings have grown tax-deferred. A) I and IV. A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. Reference: 12.3.3 in the License Exam. C) The investor's concerns about taxes. Essential Characteristics: If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? Based on the clients profile which of the following would be the best recommendation? Reference: 12.1.1 in the License Exam. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. D)variable annuities offer the investor protection against capital loss. This factor is used to establish the dollar amount of the first annuity payment. B) Life annuity. Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. These include white papers, government data, original reporting, and interviews with industry experts. When may a variable annuity account be surrendered? A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. The paper publication will not be rereleased. A)not suitable \hspace{7pt} b. December 303030, to record the employers payroll taxes on the payroll to be paid on December 313131. *A periodic payment immediate annuity is a contradiction in terms. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. A)equity funds. 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: About Us The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? Question #29 of 48Question ID: 606831 The payout compared to the initial payout upon annuitization. "Variable Annuities: What You Should Know," Pages 67. D) 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. A) not suitable A) taxed at a reduced rate. Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. Which of the following is NOT associated with characteristics of shares Chapter 6-Classification Annuities Flashcards | Quizlet The number of accumulation units is always fixed throughout the accumulation period. The earnings are taxable but the cost basis is returned tax free. Question #19 of 48Question ID: 606826

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