Final answer. A)value of underlying securities held in the separate account. A) I and II. B)suitable regardless of funding sources A variable annuity's separate account is: A separate account will invest in a number of different securities. Reference: 12.3.3 in the License Exam. B)Universal variable life policy. Reference: 12.1.2 in the License Exam. D) the payout plans provide the client income for life. An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is: C) 3800. An annuity is a continuous stream of equal periodic payments from one party to another for a specified period of time to fulfill a financial obligation. D)II and III. D) an accounting measure used to determine the contract owner's interest in the separate account. 8 annuities provide a guaranteed rate of return, whereas annuities provide conservative to aggressive investments whose rates of return are not guaranteed. Variable annuities involve underlying equity investments in a separate account. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. Based on the clients profile which of the following would be the best recommendation? Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. 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. a variable annuity guarantees payments for life. Which of the following is not a characteristic of a program module? Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. Carefully look at your options when choosing an annuity. None of the other investments listed here offer tax-deferred growth. During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. A life with period certain contract guarantees payments for a specified number of years to a named beneficiary if the annuitant dies during that time. *Variable annuity contracts must be sold by prospectus due to the characterization of the separate accounts as securities, which must be registered under the Securities Act of 1933 and the Investment Company Act of 1940. externalities. What is the taxable consequence of this withdrawal to your client? What Are the Biggest Disadvantages of Annuities? The creation of an estate. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. Question #14 of 48Question ID: 606823 The AG49-A Revisions Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. A) waiver of premium Your 65-year-old client owns a nonqualified variable annuity. A prospectus for a variable annuity contract: B) accumulation units. The number of accumulation units is always fixed throughout the accumulation period. required to be located off of the company's premises. B) the safety of the principal invested. order now. There are two elements that contribute to the value of a variable annuity: the principal, which is the amount of money you pay into the annuity, and the returns that your annuitys underlying investments deliver on that principal over the course of time. The fees on variable annuities can be quite hefty.
Shortening the Securities Transaction Settlement Cycle Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. The wage for applicants for this position is $45,979.00 per year. D) There is no guarantee regarding the investment results of the separate account. C)municipal bonds. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. The remainder of the premium is invested in the separate account. MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. 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.
Variable Annuity Features | Annuity Guys Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. *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. C) The investor's concerns about taxes. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. D)an accounting measure used to determine payments to the owner of the variable annuity. C)Life annuity.
Annuities | FINRA.org When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. 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) accumulation shares. D) a minimum of 10 years of variable payments, followed by additional variable payments for life. C) III and IV. C) early annuity phase-in A) I and III.
Flashcards - Securities and Tax - FreezingBlue He makes several statements regarding the contract. Securely download your document with other editable templates, any time, with PDFfiller. If the account is annuitized, the investor has chosen a payout option. 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 exception is the fixed income annuity, which has a moderate to high payout that rises as the annuitant ages). Variable annuity salespeople must register with all of the following EXCEPT: A) a variable annuity contract will provide a fluctuating monthly check upon the annuitization of the contract An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. Deal with mathematic Math is all about solving equations and finding the right answer. The value of these units varies with the performance of the separate account.
Travel Times Journal found that the average per person cost of a 10-day trip along the Pacific coast, per person, is $1,015. D) Variable annuities. B) It will be lower.
GuranteedExamLife Flashcards by Gabriel Martinez | Brainscape What will this transaction provide? Licensed to sell Variable Annuities in the following state(s): FL, TX . Explain what is meant by positive and negative continues payments as long as one annuitant is alive. A) It will be higher. D)separate account may consist of mutual funds. During the . A universal variable life policy should be purchased primarily for its insurance features, not its investment features. C) annuity units. D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. The earnings are taxable but the cost basis is returned tax free. An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. Here is how guaranteed lifetime annuities work. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? The tax on this is $2,800 ($10,000 x 28%). All of the following are true about annuities EXCEPT: they have all the same characteristics as life insurance. D)Joint and last survivor annuity. In March, the actual net return to the separate account was 8%. a variable annuity does not guarantee payments for life. A) waiver of premium B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually The number of annuity units is fixed at the time of annuitization. A) Ordinary income tax on earnings exceeding basis. When the second party dies, all payments cease. Which of the following recommendations would best meet the customer profile? 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. A) II and III. Once a variable annuity has been annuitized:
a variable annuity has which of the following characteristics C) number of accumulation units. B)fixed in value until the holder retires. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity).
IBM hiring Practitioner- Policy Admin in Noida, Uttar Pradesh, India In March, the actual net return to the separate account was 8%. Distributions from nonqualified variable annuities are: 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. Are Variable Annuities Subject to Required Minimum Distributions? D) the number of annuity units becomes fixed when the contract is annuitized. D) a variable annuity contract is subject to fluctuating values due to market fluctuations of the underlying separate accounts. is required by the Securities Act of 1933. B) IPO. Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 *A variable annuity payout is determined by comparing account performance with AIR, and this month's payout with last month's payout. B)It will be lower. 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 . can be sold by someone with only an insurance license He makes the following four statements, all of which are true EXCEPT Reference: 12.3.2.1 in the License Exam. A) each annuity unit's value is fixed, but the number of annuity units varies with time. This cloud model is composed of five essential characteristics, three service models, and four deployment models. A)Corporate debt securities The offers that appear in this table are from partnerships from which Investopedia receives compensation. On an annual basis, the machine will produce 20,000 units with an expected selling price of $10, prime costs of$6 per unit, and a fixed cost allocation of $3 per unit. The tax on this amount is $3,000. *A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. C)Money market fund. Round to the nearest hundredth of a percent. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. Fixed Annuity, Retirement Annuities: Know the Pros and Cons. B)unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. The annuity unit's value represents a guaranteed return. There are also immediate annuities, which begin paying income right away. B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract
Herpes Zoster has all of the following characteristics except: These contracts come with high surrender charges. 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
No Hibernation for Issuers of Index-Linked Variable Annuities and Index C)insurance companies keep variable annuity funds in separate accounts from other insurance products. A) Fixed annuities. D)II and III.
Variable Annuities Flashcards | Quizlet 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. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? Question #36 of 48Question ID: 606805 A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. Reference: 12.1.4.1 in the License Exam. Variable annuities operate in similar ways to . A)Fixed annuities. A) I and II D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. D)0. D) Any time before the accumulation period. A) I and III. What Are the Risks of Annuities in a Recession? Which of the following statements regarding variable annuities are TRUE? Which of the following is characteristic of variable annuities? 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. A) The policy provides a minimum guaranteed death benefit. d. Each month the payment will increase, decrease, or remain the same as the previous month's payment . are purchased primarily for their insurance features What Are Ordinary Annuities, and How Do They Work (With Example)? Policyholders . C) I and IV. C) III and IV. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). A) 4000. A customer, who has contributed to an IRA and to an employer matching 401(k) plan continuously for many years, wants to purchase an annuity contract to add additional monthly income once retired. D)accumulation units. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. When the second party dies, all payments cease. An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). IV. A) an accounting measure used to determine payments to the owner of the variable annuity. How Are Nonqualified Variable Annuities Taxed? Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. 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. The number of annuity units is fixed at the time of annuitization. A)accumulation shares. Single payment deferred annuity. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. EEO IS THE LAW . Future annuity payments will vary according to the separate account's performance. D) Variable annuities. Periodic payment deferred annuity. IV. 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)II and IV. A) Age 56, available cash to invest, makes the maximum retirement plan contributions to an existing IRA and 401(k) plan A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. Universal variable life policies Distribution can take place before or during any solicitation for sale. B)IRAs. A trend makes considerable influence or impact. The fixed payment that the annuitant receives loses purchasing power over time as a result of inflation. Typically, they allow one withdrawal each year during the accumulation phase. C)earnings only and taxable B)II and III. This recommendation is: D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? Therefore, ordinary income taxes will apply to the entire $10,000. The value of an annuity unit varies from month to month according to the performance of the separate account in comparison to the assumed interest rate. a. Variable Annuity Advantages and Disadvantages, Guide to Annuities: What They Are, Types, and How They Work. The funds are not liquid due to the surrender fees, and there is also a 10% penalty on withdrawals before age 59-. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. Reference: 12.1.2 in the License Exam. 222. Variable annuities should be considered long-term investments due to the limitations on withdrawals. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. This customer has no spouse or dependents, which negates the value of the death benefit. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract D) I and II. Reference: 12.1.2.1.1. in the License Exam. 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. B) I and IV. A) A 75 year old women, who is a former executive retired for over ten years who wants to preserve as much capital as she can to leave to her two grandchildren. B) prime rate. Investopedia requires writers to use primary sources to support their work. D) III and IV. B) I and II. A) Joint tenants annuity. *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.
Financial Sales Professional Job in Fort Worth, TX at New York Life vote for the investment adviser. When the annuitization option is selected, each payment represents both capital and earnings. *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. A prospectus for a variable annuity contract: Therefore, ordinary income taxes will apply to the entire $10,000. 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.