the agent must be licensed in both insurance and securities. The number of annuity units varies. D)variable annuities offer the investor protection against capital loss. D)II and III. The number of accumulation units can rise during the accumulation period. Are There Penalties for Withdrawing Money From Annuities? vote for the investment adviser. D) tax free. B) variable annuities. Typically, they allow one withdrawal each year during the accumulation phase. C) annuity units. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. They can be classified by: Nature of the underlying investment - fixed or variable 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. The downside was that the buyer was exposed to market risk, which could result in losses. A variable annuity is a tax-deferred retirement vehicle that allows you to choose from a selection of investments and then pays you a level of income in retirement that is determined by the performance of the investments you choose. A)IPO. Though its stated return might not be as high as the other choices potential returns, only a fixed annuity fits the objective and risk averse traits of this client. She will receive the annuity's entire value in a lump-sum payment. Which of the following is characteristic of variable annuities? 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. A 45-year-old employed individual with no other retirement accounts in place B)cost of living. D) Two-thirds of the withdrawal is taxable as ordinary income. III. Once annuitized, the number of annuity units does not vary. View full document. Lifetime vs. fixed period annuities 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. At the end of the year, your account has a value of $10,750 ($5,500 in the stock fund and $5,250 in the bond fund), minus fees and charges. An investor who has purchased a nonqualified variable annuity has the right to: D) II and III. Universal variable life policies Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. C)II and IV. B)a majority vote from the shareholders is required to change the investment objectives. D) 100% tax deferred. Options. Word bank:Fixed, Variable Fixedannuities provide a guaranteed rate of return, whereas Variableannuities provide conservative to aggressive investments whose rates of return are not guaranteed. "Variable Annuities: What You Should Know," Page 3. A)value of underlying securities held in the separate account. D) 4500. A) a minimum rate of return is guaranteed. A) be paid to a designated beneficiary. A variable annuity is a security and must be registered with the SEC, not FINRA. B) the rate of return is determined by the underlying portfolio's value. B) variable annuities are classified as insurance products. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. II. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: Fixed annuities, on the other hand, provide a guaranteed return. The annuity unit's value represents a guaranteed return. 222. Which of the following statements is not true about the characteristics of a trend? When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. If the client, who is in a 30% tax bracket, makes a random withdrawal of $15,000, what will the tax liability to the IRS be? B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. 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. D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. Practice all cards. Prudential's businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, asset management, and real estate services. D)each annuity unit's value is fixed, but the number of annuity units varies with time. The investor has already paid tax on the contributions but the earnings have grown tax-deferred. A) two people are covered and payments continue until the second death. D) I and II. Variable annuities gave buyers a chance to benefit from rising markets by investing in a menu of mutual funds offered by the insurer. The number of accumulation units is always fixed throughout the accumulation period. For example, when paying rent, the rent payment (PMT) . A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. On any device & OS. The remainder of the premium is invested in the separate account. B)fixed in value until the holder retires. Life Insurance vs. Annuity: What's the Difference? If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. D)all return of cost basis and nontaxable, Annuitized payments from a variable annuity are viewed for tax purposes as part earnings and part cost basis. Your 55-year-old client invested $50,000 four years ago in a nonqualified variable annuity. Needs - are goal-directed forces that people experience. C) Unit refund life option B) 0. Reference: 12.1.2 in the License Exam. If the annuitant should die during that time, any death benefit would be paid to a beneficiary designated by the annuitant at the time the annuity was purchased. Future annuity payments will vary according to the separate account's performance. Question #31 of 48Question ID: 606836 A) a minimum rate of return is guaranteed. Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. A variable annuity's separate account is: A) used for the investment of monies paid by variable annuity contract holders B) separate from the insurance company's general investments C) operated in a manner similar to an investment company D) as much a security as it is an insurance product All of the above D)the safety of the principal invested. Explain what is meant by positive and negative Variable annuities operate in similar ways to . IV. John is the annuitant in a variable plan, and Sue is the beneficiary. a variable annuity does not guarantee an earnings rate of return. The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. No software installation. A) It will be higher. Similarly, CDs are insured, thereby eliminating risk and guaranteeing a return. He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. B) II and IV. 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. Which of the following recommendations would best meet the customer profile? 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. D) minimum guaranteed death benefit. If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. 8 annuities provide a guaranteed rate of return, whereas annuities provide conservative to aggressive investments whose rates of return are not guaranteed. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? B)each annuity unit's value varies with time, but the number of annuity units is fixed. D) Joint and last survivor annuity. Reference: 12.2.1 in the License Exam. Question #47 of 48Question ID: 606813 However, they are protected by state guaranty associations in the event that the insurance company providing the product goes out of business. Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return. B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually Variable Annuities. Reference: 12.2.1 in the License Exam. B)II and III. The second phase is triggered when the annuity owner asks the insurer to start the flow of income, often referred to as the payout phase. d. Each month the payment will increase, decrease, or remain the same as the previous month's payment . All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: A. \text{Salaries:} && \text{Deductions:}\\ The accumulation unit's value is used to calculate the total value of the account. B) I and IV. The separate account is NOT likely to invest in: This role is also eligible for annual short-term incentive compensation. Job Classification: Corporate - Legal and Compliance. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. 111. Question #38 of 48Question ID: 606798 Based on this information the RR should: C)municipal bonds. \hspace{7pt} a. December 303030, to record the payroll. C)I and IV. the SEC. C)the SEC. B) taxed as ordinary income. D) I and IV. D)It cannot be determined until the April return is calculated. The value of these units varies with the performance of the separate account. a. The growth portion is taxed as ordinary income. 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 A) taxed at a reduced rate. 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. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. B)II and III. A separate account will invest in a number of different securities. The tax on this is $2,800 ($10,000 x 28%). C)Mortality risk. An investor who purchases a fixed annuity contract assumes purchasing-power risk. 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. A Variable Annuity has which of the following characteristics? C)Keogh plans. II. *Once a variable annuity is annuitized, the accumulation units are converted into a fixed number of annuity units. The payout compared to last month's payout. 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. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. III. When a variable annuity contract is annuitized, the number of annuity units is fixed. D)I and III. III) A hierarchy of corporate staff evaluates divisions' plans and performance. D) Keogh plans. 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. \hspace{7pt} a. December 303030, to record the payroll. D) the payout plans provide the client income for life. A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. C) A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. Periodic payments are not a consideration because normally the payments into an annuity are level or in a lump sum. Distributions to the annuitant will fluctuate during the payout period. C) The investor's concerns about taxes. D) I and III. B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract Outgoing personality with the ability to develop relationships (i.e., "People Person") and a sincere desire to help others Fearless, positive attitude, and willingness to be accountable for results Organized, detail-oriented, and excellent time-management skills A desire for continuous learning Question #18 of 48Question ID: 606827 Clusters of vesicles in various stages. **Because common stocks are not fixed dollar investments, they have the opportunity to keep pace with inflation. *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. A) Fixed annuities. A joint life with last survivor annuity: A registered person recommends the purchase of a variable annuity to one of his clients. Can I Borrow from My Annuity for a House Down Payment? D)Municipal bonds. Question #27 of 48Question ID: 606818 A) Ordinary income tax on earnings exceeding basis. The annuity unit's value represents a guaranteed return. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. A) II and IV. a variable annuity guarantees an earnings rate of return. What is the taxable consequence of this withdrawal to your client? B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. C) value of underlying securities held in the separate account. D)II and III. Reference: 12.1.2.1.2 in the License Exam. C) II and IV. 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. III. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. The accumulation unit's value is used to calculate the total value of the account. A) mutual fund units. Deferred Annuity Definition, Types, How They Work, What Is a Fixed Annuity? If the annuitant should die during that time, any death benefit would be paid to a beneficiary designated by the annuitant at the time the annuity was purchased. A)defined contribution plans. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. B) allow customers to opt out of sharing of financial information with certain nonaffiliated firms. B)It will be lower. And, unlike a fixed annuity, variable annuities do not provide any guarantee that you will earn a return on your investment. 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. the state insurance commission. 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. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. a variable annuity does not guarantee payments for life. D) variable annuities may only be sold by registered representatives. C) III and IV. IBM Noida, Uttar Pradesh, India1 month agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. About Us Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Eric W. Noreen, Peter C. Brewer, Ray H Garrison. 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. A variable annuity's separate account is: The value of the separate account is now $30,000. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. A) variable annuities offer the investor protection against capital loss. D) II and IV. U.S. Securities and Exchange Commission. 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. Facebook reports that 70%70 \%70% of their users are from outside the United States and that 50%50 \%50% of their users log on to Facebook daily. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. an annuitant lives longer than expected. It is innate and universal. Distribution of dividends occurs during the accumulation period. C)the invested money will be professionally managed according to the issuers' investment objectives. During payout, distributions will fluctuate due to performance in the separate account. D) cost of living. B)part earnings and part cost basis Complete a blank sample electronically to save yourself time and money. The separate account is NOT likely to invest in: An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is: The AG49-A Revisions Over the past five years, 's dividend yield has averaged % per year. The number of annuity units rises once annuitization begins. The accumulation period of a variable annuity may continue for many years. C)III and IV The amount of the purchase payments that go into the account may be less than you paid because fees were taken out of the purchase payments. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. Distribution can take place before or during any solicitation for sale. This includes transportation, food, lodging, and entertainment. Question #20 of 48Question ID: 606808 If the separate account of a variable annuity with an AIR of 4% had actual net earnings of 8% in March, the April payment will be higher than the March payment. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. D)variable annuities. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually C) be returned to the separate account. *Since this is a nonqualified annuity (with no tax deduction), the client pays taxes only on the growth portion or, in this case, $10,000. How is the distribution taxed? 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. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. *BEST Suited for VA-Age 56, available cash to invest, maxes out IRA and 401(k) plan VA will be supplemental income, would not be suitable for cust. A)the number of annuity units becomes fixed when the contract is annuitized. 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. A)III and IV. What Are the Distribution Options for an Inherited Annuity? D)partially a tax-free return of capital and partially taxable. Upon John's death during the accumulation period, Sue takes a lump-sum payment. A 3 *Waiver of premium is a benefit available on qualified life insurance contracts, usually in the form of a rider, which provides for the waiver of premium payments that fall due while the policyholder is totally disabled. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). B)Two-thirds of the withdrawal is taxable as ordinary income. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. You can learn more about the standards we follow in producing accurate, unbiased content in our. The creation of an estate. C) Life annuity with period certain. *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. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero Qualified Longevity Annuity Contract (QLAC): Definition, Taxes, and Example, Present Value of an Annuity: Meaning, Formula, and Example, Future Value of an Annuity: What Is It, Formula, and Calculation, Calculating Present and Future Value of Annuities, Present Value Interest Factor of Annuity (PVIFA) Formula, Tables. C) the yield is always higher than bond yields. C) suitable regardless of funding sources A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units. A security is any investment for profit with management performed by a third party. C)not suitable because a lifetime income rider is only for someone who is already retired Final answer. C) none of these. An accumulation unit in a variable annuity contract is: A)an accounting measure used to determine the contract owner's interest in the separate account. D) accumulation shares. B) the safety of the principal invested. a. B) The investor's marital status. It was a lump-sum purchase. The offers that appear in this table are from partnerships from which Investopedia receives compensation. A)number of annuity units. The annuitant may not contribute and withdraw simultaneously. Deal with mathematic Math is all about solving equations and finding the right answer. An annuity may be purchased under all of the following methods EXCEPT: A) partially a tax-free return of capital and partially taxable. a. it performs a single task b. it is self-contained and independent of other modules c. it is relatively short d. all of the above are chamcleristics of a program module 7. B) value of annuity units. B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. How Good of a Deal Is an Indexed Annuity? Distributed along a dermatome. Because this is not guaranteed, the policyowner bears the investment risk. During the accumulation phase, you make purchase payments. In March, the actual net return to the separate account was 8%. Reference: 12.3.1 in the License Exam. C)number of accumulation units. *A variable annuity is a security and must be registered with the SEC, not FINRA. Reference: 12.1.4.1 in the License Exam. 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: C)Variable annuity contract with a discussion regarding interest rate risk B) the client may vote for the board of directors or board of managers. Variable annuities must be registered with: An investor owning which of the following variable annuity contracts would hold accumulation units? During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. Surrender fees and penalties for early withdrawal. A)exempt from taxes A) waiver of premium a variable annuity guarantees an earnings rate of return. Expert Answer. 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. must precede every sales presentation. a variable annuity does not guarantee an earnings rate of return. variable annuity without paying tax at the time of the transfer. D)separate account may consist of mutual funds. have investment risk that is assumed by the investor Which of the following are defined as securities? However, a discussion should occur regarding the risks that are associated with a fixed annuity; purchasing power risk. B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. C) Mutual fund portfolio consisting of blue chip stocks Therefore, variable annuities must be registered with the state insurance commission and the Securities and Exchange Commission. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. *Contributions to a nonqualified annuity are made with the owner's after-tax dollars. Reference: 12.3.2.1 in the License Exam. Many variable annuities invest the separate account in mutual funds. C) single payment immediate annuity. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. B)I and III. Fixed interest rates during the payout period The value of each accumulation unit varies: Daily Variable annuities have Variable interest rates and benefits All of the following statements are true regarding the interest rate guarantees of fixed annuities, EXCEPT: Investopedia requires writers to use primary sources to support their work. The most popular type of variable annuity is a deferred annuity. This would not align with the couple's criteria for coverage as long as they both live. The number of annuity units is fixed at the time of annuitization. \hspace{10pt} Federal unemployment (employer only), 0.8%0.8\%0.8%. Early withdrawal is either removal of funds from a fixed-term investment before the maturity date, or the removal of funds from a tax-deferred investment account or retirement savings account before a prescribed time. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. A) partially a tax-free return of capital and partially taxable. 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. The features of variable deferred annuities are many. must precede every sales presentation. Which 2 of the 4 client profiles would a VA be LEAST suitable for? Immediate life annuity. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. B)4200. C) Universal variable life policy. C)II and IV. D) Variable annuity. A customer is receiving annuitized payments from a variable annuity. D) 4200. (Check all that apply.) 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. B)100% taxable. D)Variable annuity contract with a discussion regarding legislative risk, A VA with its investments in the separate account subject to market risk would not align with the customer's objective. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. A 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition When the second party dies, all payments cease. These include white papers, government data, original reporting, and interviews with industry experts. C) 10 years of variable payments. B)I and IV. IBM is a global brand and has its presence in 170 countries and operates . Funding a VA contract by cashing out either life insurance policies or existing VA contracts, especially those held for a short period of time is not suitable. B) the state insurance department. C) a variable annuity contract does not guarantee any type of return Transcribed image text: 6. U.S. Securities and Exchange Commission. \end{array} What percentile is represented by $710? C) II and IV. A) Money market fund. Question #14 of 48Question ID: 606823 B)Fixed annuity contract with a discussion regarding timing risk This cloud model is composed of five essential characteristics, three service models, and four deployment models. D)suitable due to the relative safety of the investment. 6102..55.001) is being updated on an ongoing basis. C)100% tax deferred. B) II and IV. An annuity is an agreement for one person or organization to pay another a series of payments. Full-Time. How to Rollover a Variable Annuity Into an IRA. Variable annuity Which of the following is characteristic of fixed annuities? On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Future annuity payments will vary according to the separate account's performance. C) 100% tax free. Reference: 12.1.1 in the License Exam. Travel Times Journal found that the average per person cost of a 10-day trip along the Pacific coast, per person, is $1,015. Both products typically have a wide range of options across equities, bonds and money market instruments.
Owens Funeral Home Recent Obituaries, Articles A
Owens Funeral Home Recent Obituaries, Articles A