If you die before the payout phase, your beneficiaries may receive a. $63,000 b.$51,000 c. $18,000 d.$6,000. Following the transition to T+1 in the U.S. markets, Commission staff will continue to work with industry leaders, public interest advocates, investors and other regulators to assess the future feasibility of a T+0 settlement standard cycle, and seek to identify ways to overcome the challenges associated with such a move, as articulated in the . C)Money market fund. Paraplanner / Marketing Support Specialist Job in Austin, TX *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. 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. The number of accumulation units can rise during the accumulation period. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. A) 2800. A) I and II C)the number of annuity units is fixed, and their value remains fixed. Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. A)100% tax free. D) I and II. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: Question #17 of 48Question ID: 606802 This includes transportation, food, lodging, and entertainment. C) taxed as ordinary income only to the extent of earnings. guarantees payments for a certain period of time. Reference: 12.3.2.4 in the License Exam. The Three Main Types of Annuity Insurance - Fixed, Variable, and Equity B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. (The exception is the fixed income annuity, which has a moderate to high payout that rises as the annuitant ages). Question #12 of 48Question ID: 606814 It is the starting point of motivation because they generate emotions. The value of the annuity units varies. Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. B)Life annuity with period certain. No Hibernation for Issuers of Index-Linked Variable Annuities and Index C) number of accumulation units. The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. III. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. B) the state insurance department. Usually the term "annuity" relates to a contract between an individual and a life insurance company. A) number of annuity units. C) I and III. 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. Reference: 12.1.2 in the License Exam. A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units. Simple and general annuities problems with solutions B) the rate of return is determined by the underlying portfolio's value. \hspace{10pt} \text{Sales salaries} & \$\hspace{5pt} 670,000 & \hspace{10pt} \text{Income tax withheld} & \$198,744\\ Therefore, ordinary income taxes will apply to the entire $10,000. A client has purchased a nonqualified variable annuity from a commercial insurance company. A) I and III. D) each annuity unit's value varies with time, but the number of annuity units is fixed. *Contributions to a nonqualified variable annuity are not tax deductible. The fees on variable annuities can be quite hefty. 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. A) The policy provides a minimum guaranteed death benefit. 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. 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. As of March 03, 2023, had a relative dividend yield of % compared to the industry median of %. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? You have 4 clients each expressing interest in a variable annuity contract. The most popular type of variable annuity is a deferred annuity. How Good of a Deal Is an Indexed Annuity? A)the yield is always higher than mortgage yields. 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 (primary needs). He makes the following four statements, all of which are true EXCEPT Variable Annuities Flashcards - Cram.com All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: B) variable annuities are classified as insurance products. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. A)III and IV. 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 The noble relatives of the Count d'Horn absolutely blocked up the ante-chambers of the regent, praying for mercy on the misguided youth, and alleging that he was insane . C)Mortality risk. Changes in payments on a variable annuity correspond most closely to fluctuations in the: B) The policyowner. The number of annuity units varies. C) insurance guarantee. D) expense guarantee. Reference: 12.1.4.1 in the License Exam. EEO IS THE LAW . The most suitable option and one considered effective for married couples is a single joint and last survivor contract. 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. Francisco R. - Financial Professional - Prudential Financial | LinkedIn Guaranteed Lifetime Annuity: How They Work, When They Pay You, This is also generally true of retirement plans. 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 &&& \underline{\underline{\$341,718}} This factor is used to establish the dollar amount of the first annuity payment. Fixed annuities typically earn at a lower, stable rate. A) 4000. The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. Immediate life annuity. As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. B) the client may vote for the board of directors or board of managers. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. A) two people are covered and payments continue until the second death. Chapter 7: Annuities Flashcards | Quizlet "Variable Annuities: What You Should Know," Page 6. IV. Essential Characteristics: a variable annuity does not guarantee an earnings rate of return. the state banking commission. B)value of annuity units. CH 7 Annuities Flashcards | Quizlet B)II and III. D) cost of living. 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 registered person recommends the purchase of a variable annuity to one of his clients. An annuity is an agreement for one person or organization to pay another a series of payments. U.S. Securities and Exchange Commission. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. LESSON 7: ANNUITIES - FIXED AND VARIABLE - course.uceusa.com Question #27 of 48Question ID: 606818 A) waiver of premium What percentile is represented by $710? Based on the clients profile which of the following would be the best recommendation? A Variable Annuity Has Which of the Following Characteristics C) a variable annuity contract does not guarantee any type of return What are the different types of annuities? | III Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. There are also immediate annuities, which begin paying income right away. Reference: 12.1.2 in the License Exam. C) III and IV. MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. Reference: 12.3.3 in the License Exam. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. Carefully look at your options when choosing an annuity. Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. The growth portion is taxed as ordinary income. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. A)I and IV. # 7 Annuities Flashcards | Quizlet D)I and III. \hspace{10pt} Medicare, 1.5%1.5\%1.5% Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. The growth portion is taxed as ordinary income. D)separate account may consist of mutual funds. 111. required to be located off of the company's premises. Variable annuities operate in similar ways to . Typically, they allow one withdrawal each year during the accumulation phase. C)100% tax deferred. A trend is formed from non-repetitive actions of people. Fixed annuities. a variable annuity does not guarantee payments for life. Her intent was to use the funds for the down payment on a house after graduation. Reference: 12.1.4.1 in the License Exam. A. Reference: 12.1.2.1.1 in the License Exam. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. A) waiver of premium If one purchases an annuity for a set price, the issuing company would invest the funds and hold them until they are supposed to be disbursed, generally based on the owner's age. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed D) III and IV. A client has purchased a nonqualified variable annuity from a commercial insurance company. D) I and III Which of the following is NOT an accurate statement concerning a variable life insurance contract? III) A hierarchy of corporate staff evaluates divisions' plans and performance. 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. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. B) Municipal bonds. Variable annuity salespeople must be registered with FINRA and the state insurance department. A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? Variable annuities involve underlying equity investments in a separate account. Your 65-year-old client owns a nonqualified variable annuity. 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. II) It has an internal capital market wherein each division competes for funds. Variable annuity salespeople must register with all of the following EXCEPT: D) the yield is always higher than mortgage yields. PDF The NIST definition of cloud computing *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. Based only on these facts, the variable annuity recommendation is The value of the separate account is now $30,000. Instructions\textsf{\textcolor{#4257b2}{Instructions}}Instructions D) a minimum of 10 years of variable payments, followed by additional variable payments for life. Travel Times Journal found that the average per person cost of a 10-day trip along the Pacific coast, per person, is $1,015. With a fixed annuity, by contrast, the insurance company assumes the risk of delivering whatever return it has promised. A variable annuity's separate account is: 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. What Are the Biggest Disadvantages of Annuities? must precede every sales presentation. During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. The growth portion is taxed as a capital gain. A) a variable annuity contract will provide a fluctuating monthly check upon the annuitization of the contract