Distribution can take place before or during any solicitation for sale. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. a variable annuity guarantees payments for life. B) the client may vote for the board of directors or board of managers. D)accumulation units. C) Mutual fund portfolio consisting of blue chip stocks Investopedia requires writers to use primary sources to support their work. 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. The value of the separate account is now $30,000. A trend is formed from non-repetitive actions of people. \hspace{10pt} \text{Office salaries} & \underline{234,000} & \hspace{10pt} \text{Medicare tax withheld} & 15,210\\ variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. Securely download your document with other editable templates, any time, with PDFfiller. Often used for retirement planning purposes, it is meant to provide a regular (monthly, quarterly, annual) income stream, starting at some point in the future. Question #22 of 48Question ID: 606803 When a variable contract is annuitized (distributed in regular payments, not as a lump sum), the number of accumulation units is multiplied by the unit value to arrive at the account's current value. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. A) Money market fund. Distributions to the annuitant will fluctuate during the payout period. B)II and III. I. 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. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. In March, the actual net return to the separate account was 8%. B)IRAs. A) the investment portfolio is managed professionally. Table1. Before buying a variable annuity, investors should carefully read the prospectus to try to understand the expenses, risks, and formulas for calculating investment gains or losses. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. C)annuity units. *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. Variable annuities are designed to combat inflation risk. B)Variable annuities. While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. Based on this information the RR should: (The exception is the fixed income annuity, which has a moderate to high payout that rises as the annuitant ages). 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. D) There is no guarantee regarding the investment results of the separate account. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. a variable annuity does not guarantee an earnings rate of return. 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. Only variable annuities have payout plans that provide the client income for life. 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. 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. D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. Annuities due are a type of annuity where payments are made at the beginning of each payment period. EEO IS THE LAW . *During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. If the customer takes a withdrawal of $10,000, what are the tax consequences? order now. the state insurance commission. A) number of annuity units. D)variable annuities offer the investor protection against capital loss. A) Age 56, available cash to invest, makes the maximum retirement plan contributions to an existing IRA and 401(k) plan *An immediate annuity has no accumulation period. D)II and III. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. It may be used by nongovernmental . A) not suitable This customer has no spouse or dependents, which negates the value of the death benefit. C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. Question #36 of 48Question ID: 606805 A) a minimum rate of return is guaranteed. 222. The entire amount is taxed as ordinary income. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. B)4200. A)100% tax free. Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. C)I and III. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. D)each annuity unit's value is fixed, but the number of annuity units varies with time. A) Ordinary income tax on earnings exceeding basis. a variable annuity guarantees an earnings rate of return. It is the starting point of motivation because they generate emotions. Contributions to a nonqualified variable annuity are not tax deductible. A) variable payments for 10 years, followed by fixed payments for life. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. *Variable annuity contracts were devised to help investors keep pace with inflation. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. D)variable annuities. && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ D)II and III. What Are the Biggest Disadvantages of Annuities? B) fixed in value until the holder retires. B) variable annuities. a. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). The original investment has grown to a value of $60,000. B)I and III. A variable annuity's separate account is: 6102..55.001) is being updated on an ongoing basis. The owner of a variable annuity has all of the following rights EXCEPT the right to vote: a. for the Board of Trustees b. to change the separate account's investment objective c. for distributing income and capital gains d. for dissolutions of the trust for distributing income and capital gains. 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 joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. c. The separate account provides for a guaranteed minimum return. B) the state insurance department. A fixed annuity is an insurance contract that pays a guaranteed rate of interest on the owner's contributions and later provides a guaranteed income. D) None, because it is the proceeds from a life insurance company. An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. the agent must be licensed in both insurance and securities. C) a variable annuity contract does not guarantee any type of return For an insurance company, mortality risk turns out unfavorably if: *Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. IV. have investment risk that is assumed by the investor 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. "Variable Annuities: What You Should Know," Pages 67. What is her total tax liability? C)II and IV. Reference: 12.1.4.1 in the License Exam. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. A registered representative recommends a variable annuity with an income rider to a client. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. Premiums made into the annuity purchase accumulation units. Try *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. Distribution can take place before or during any solicitation for sale. C) Life annuity with period certain. 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. Reference: 12.2.1 in the License Exam. If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? U.S. Securities and Exchange Commission. Which of the following recommendations would best meet the customer profile? Single payment deferred annuity. a life insurance holder lives longer than expected. A)III and IV. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. Then find the probability of the event. During the accumulation phase, you make purchase payments. The funds in an annuity are off-limits to creditors and other debt collectors. Fixed annuities typically earn at a lower, stable rate. Each of the remaining statements are true. . In addition, an element of risk must be present. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. A) I and IV. B) accumulation units. Essential Characteristics: If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? B) The investor's marital status. Question #16 of 48Question ID: 606807 Suppose that 20%20 \%20% of their users are United States users who log on daily. As of March 03, 2023, had a relative dividend yield of % compared to the industry median of %. Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: Question #19 of 48Question ID: 606826 Reference: 12.2.1 in the License Exam. B) variable annuities are classified as insurance products. The remainder of the premium is invested in the separate account.
Spring Pillow Covers 16x16, Articles A