a variable annuity has which of the following characteristics

Clusters of vesicles in various stages. A) a minimum rate of return is guaranteed. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. Your client owns a variable annuity contract with an AIR of 4%. C) III and IV. B) the safety of the principal invested. \hspace{7pt} a. December 303030, to record the payroll. However, a discussion should occur regarding the risks that are associated with a fixed annuity; purchasing power risk. In addition, an element of risk must be present. savingsbonds30,420Groupinsurance45,630$341,718\begin{array}{lrlr} The beneficiary is taxed at ordinary income rates during the year the lump sum is received. Fixed Annuity, Retirement Annuities: Know the Pros and Cons. Variable Annuity: Definition and How It Works, Vs. Fixed Annuity a variable annuity does not guarantee payments for life. &&& \underline{\underline{\$341,718}} B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. . A) taxed at a reduced rate. MetLife, Inc. Senior Customer Care Advocate Annuities ($22 per hour C)Corporate bonds. *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. D) value of accumulation units. D) the payout plans provide the client income for life. D) None, because it is the proceeds from a life insurance company. D) Age 27, saving for first home. Changes in payments on a variable annuity correspond most closely to fluctuations in the: A customer is receiving annuitized payments from a variable annuity. Question #38 of 48Question ID: 606798 C) number of accumulation units. Licensed to sell Variable Annuities in the following state(s): FL, TX . C) II and III. Reference: 12.1.2 in the License Exam. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. Solved The following are characteristics of a public | Chegg.com The growth portion is taxed as a capital gain. B) It will be lower. How does an indexed annuity differ from a fixed annuity? When the annuitization option is selected, each payment represents both capital and earnings. Reference: 12.1.2.1.1. in the License Exam. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Are There Penalties for Withdrawing Money From Annuities? A) It will be higher. 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. C) II and IV A trend makes considerable influence or impact. A) the investment portfolio is managed professionally. Question #27 of 48Question ID: 606818 B) The entire $10,000 is taxable as ordinary income. III. *A variable annuity payout is determined by comparing account performance with AIR, and this month's payout with last month's payout. B) The death benefit cannot ever be more than the guaranteed benefit. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. Fixed annuities pay a fixed monthly benefit which loses purchasing power if there is inflation. 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. variable annuity without paying tax at the time of the transfer. D) an accounting measure used to determine the contract owner's interest in the separate account. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. U.S. Securities and Exchange Commission. no. B) II and IV. D) I and III. B)Universal variable life policy. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. Which of the following is NOT an accurate statement concerning a variable life insurance contract? D) It cannot be determined until the April return is calculated. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. Once annuitized, the number of annuity units does not vary. A) be paid to a designated beneficiary. Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. B)fixed in value until the holder retires. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. The accumulation unit's value is used to calculate the total value of the account. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. EEO IS THE LAW . A)II and IV. What is the taxable consequence of this withdrawal to your client? 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. C)III and IV. a. PDF Prudential IncomeFlex Target Vanguard Balanced Index Fund Immediate life annuity with 10-year period certain. Try Suppose that 20%20 \%20% of their users are United States users who log on daily. Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. 7 - Annuities Flashcards | Quizlet A) The fact that the annuity payment may increase or decrease. D) the number of annuity units becomes fixed when the contract is annuitized. b) What probability is the 20%20 \%20% mentioned above? C) III and IV. D)suitable due to the relative safety of the investment. All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. C)The entire $10,000 is taxable as ordinary income. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. When the annuitization option is selected, each payment represents both capital and earnings. Annuity units are units of ownership when the contract is in the payout stage. B) The entire $10,000 is taxable as ordinary income. C)I and IV. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. C)II and IV. D)Dow Jones Industrial Average. 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. required to be located off of the company's premises. D) Variable annuity. 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. A) not suitable View full document. 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. Which of the following recommendations would best meet the customer profile? Determine the revenue equation given the profit and expense equations. The growth portion is taxed as a capital gain. Which of the following recommendations would best meet the customer profile? A) I and IV. D)money market funds. Question #33 of 48Question ID: 606832 An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. A registered representative recommends a variable annuity with an income rider to a client. c) Construct a contingency table showing all the joint and marginal probabilities. C) 3800. Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies. Therefore, ordinary income taxes will apply to the entire $10,000. A variable annuity has two phases: an accumulation phase and a payout (annuitization) phase. B) The policyowner. PDF Variable Annuities: What You Should Know - SEC Question #26 of 48Question ID: 606811 An investor who has purchased a nonqualified variable annuity has the right to: 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 The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). must precede every sales presentation. C) II and III. The payout compared to last month's payout. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. C) II and III. Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 Once a customer annuitizes a variable annuity, which of the following statements are TRUE? 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. I. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. C)the SEC. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. *Annuity death benefits are generally paid in a lump sum. Therefore, ordinary income taxes will apply to the entire $10,000. C)earnings only and taxable An immediate annuity is designed to pay an income one time-period after the immediate annuity is bought. *A variable annuity is a security and must be registered with the SEC, not FINRA. A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. C)II and IV. B)I and III. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. A) periodic payment immediate annuity. B)suitable regardless of funding sources He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. An investor owning which of the following variable annuity contracts would hold accumulation units? Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. D) be paid to the issuing company to complete the plan. He makes several statements regarding the contract. B)It will be lower. B) value of annuity units. This guideline has been prepared for use by Federal agencies. D)I and III. *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. Both products typically have a wide range of options across equities, bonds and money market instruments. Over the past five years, 's dividend yield has averaged % per year. Get the free Learn About Annuities and Their Myths - F&G A) A variable annuity The accumulation period of a variable annuity may continue for many years. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. # 7 Annuities Flashcards | Quizlet Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. What percentile is represented by $710? Reference: 12.1.4.1 in the License Exam. If your client, who is in the 28% tax bracket, makes a lump-sum withdrawal of $15,000, what tax liability results from the withdrawal? Question #43 of 48Question ID: 606809 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. B) variable annuities. Find the per-day expense for one of these travelers who had a z-score of -1.6. c. A Bargain Times Vacation Blog writer claimed to have done this vacation for a cost of$710 per person. D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. D) III and IV. D) variable annuities may only be sold by registered representatives. A) variable payments for 10 years, followed by fixed payments for life. 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. This factor is used to establish the dollar amount of the first annuity payment. All of the following statements regarding variable annuities are true EXCEPT: A)II and III 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. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed Once a variable annuity has been annuitized: During the . Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. A)the state banking commission. A separate account will invest in a number of different securities. 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. A registered person recommends the purchase of a variable annuity to one of his clients. Question #36 of 48Question ID: 606805 can be sold by someone with only an insurance license A) number of annuity units. B)Tax-free municipal bonds Shortening the Securities Transaction Settlement Cycle D) accumulation shares. A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. This compensation may impact how and where listings appear. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. III) A hierarchy of corporate staff evaluates divisions' plans and performance. "Variable Annuities: What You Should Know," Page 6. C)III and IV. C) II and III. D) each annuity unit's value varies with time, but the number of annuity units is fixed. C) 10 years of variable payments. A 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition D)I and II. a) What percentage of Facebook's users are from the United States? Reference: 12.2.1 in the License Exam. D) I and IV. D) expense guarantee. D) Variable annuities. D) II and IV. Generally, a life-only contract pays the most per month because payments cease at the annuitant's death. 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. Income that cannot be outlived by the owner The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation. Variable annuities must be registered with: Universal variable life policies B) the number of annuity units is fixed, and their value remains fixed. What is the taxable consequence of this withdrawal to your client? 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)Purchasing power risk. B) be paid to any legal heirs as recognized by the annuitant's state of domicile. are purchased primarily for their insurance features A) I and IV. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. Each of the remaining statements are true. Reference: 12.1.1 in the License Exam. What Are the Risks of Annuities in a Recession? Herpes Zoster has all of the following characteristics except: Group of answer choices. B)Variable annuities. D) I and IV C)I and IV. *The most important consideration in purchasing a variable annuity is to be aware that benefit payments will fluctuate with the investment performance of the separate account. When the first party dies, the annuity payment is made to the survivor. C) annuity units. \hspace{7pt} b. December 303030, to record the employers payroll taxes on the payroll to be paid on December 313131. A) The fact that the annuity payment may increase or decrease. The fees on variable annuities can be quite hefty. A)There is no tax as the withdrawal is considered return of capital. You have 4 clients each expressing interest in a variable annuity contract. His objective is monthly income that he can receive after he retires to supplement his small pension and social security benefits. If a customer is about to buy a variable annuity contract and wants to select an annuity with a payout option providing the largest possible monthly payment, which of the following payout options would be most suitable? B) 100% taxable. Contributions to a nonqualified variable annuity are not tax deductible. Diagnosis is made by punch biopsy. A) periodic payment immediate annuity. None of the other investments listed here offer tax-deferred growth. The owner of a variable annuity has all of the following rights EXCEPT B)I and III. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. During the accumulation phase, the number of accumulation units will increase as additional money is invested. 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. Job Classification: Corporate - Legal and Compliance. A)Fixed annuities. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. In this case, the investor is taking a lump-sum distribution before reaching age 59- and must pay an additional 10% penalty on the taxable amount. Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. A)variable annuities will protect an investor against capital loss. 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. Variable annuities are riskier than fixed annuities because the underlying investments may lose value. A)Joint tenants annuity. The most suitable option and one considered effective for married couples is a single joint and last survivor contract. You can tailor the income stream to suit your needs. For an insurance company, mortality risk turns out unfavorably if: 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. Variable Annuities. *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. D) I and II. During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. This factor is used to establish the dollar amount of the first annuity payment. The number of annuity units rises once annuitization begins. The number of annuity units is fixed at the time of annuitization. Variable annuity Which of the following is characteristic of fixed annuities? A) II and IV. *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. The funds are not liquid due to the surrender fees, and there is also a 10% penalty on withdrawals before age 59-. While a variable annuity has the benefit of tax-deferred growth, its annual expenses are likely to be much higher than the expenses of a typical mutual fund. D) Keogh plans. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? C)the invested money will be professionally managed according to the issuers' investment objectives. Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 The investor has already paid tax on the contributions but the earnings have grown tax-deferred. 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)II and III. Annuities | FINRA.org A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. 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. If the customer takes a withdrawal of $10,000, what are the tax consequences? When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). *During the accumulation phase, the number of accumulation units will increase as additional money is invested.

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