In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. Reference: 12.1.4.1 in the License Exam. C)Money market fund. an annuitant lives longer than expected. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. a variable annuity does not guarantee an earnings rate of return. Variable annuity salespeople must register with all of the following EXCEPT: Which of the following are defined as securities? When the annuitization option is selected, each payment represents both capital and earnings. Which of the following recommendations would best meet the customer profile? During the accumulation phase, the number of accumulation units will increase as additional money is invested. Reference: 12.1.4.1 in the License Exam. III. B)suitable regardless of funding sources Question #12 of 48Question ID: 606814 Your client has a large sum of money to invest from the proceeds of the sale of his home. 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: D)Municipal bonds. Reference: 12.3.3 in the License Exam. The wage for applicants for this position is $45,979.00 per year. But again, the need to designate beneficiaries is not an issue for this annuitant. *The investor has already paid tax on the contributions but the earnings have grown tax-deferred. How Good of a Deal Is an Indexed Annuity? The time period depends on how often the income is to be paid. In March, the actual net return to the separate account was 8%. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. When the first party dies, the annuity payment is made to the survivor. D) not suitable because a lifetime income rider is only for someone who is already retired. A) It will be higher. e) Are From the United States and Log on every day independently? 111. Reference: 12.1.2.1.2 in the License Exam. Therefore, ordinary income taxes will apply to the entire $10,000. Your client owns a variable annuity contract with an AIR of 4%. Are Variable Annuities Subject to Required Minimum Distributions? Changes in payments on a variable annuity correspond most closely to fluctuations in the: Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. Reference: 12.1.2 in the License Exam. C) Life annuity with period certain. *Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. approve changes in the plan portfolio. 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 dissolution of the trust c. for distributing income and capital gains. An annuity is an agreement for one person or organization to pay another a series of payments. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. Can I Borrow from My Annuity for a House Down Payment? When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? A customer has an investment objective of keeping pace with inflation while assuming moderate risk. He makes several statements regarding the contract. The number of annuity units rises once annuitization begins. This includes transportation, food, lodging, and entertainment. A) I and II C) A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. IV. The creation of an estate. Variable Annuities. A) The fact that the annuity payment may increase or decrease. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. A) I and IV. D) A 50 year old individual with $50,000 cash to invest who has already made the maximum contributions to an IRA and the 401(k) plan at his place of employment and would like to minimize some of the tax consequences of his currently high tax bracket. C)not suitable because a lifetime income rider is only for someone who is already retired P=525p2+65,326p185,000E=326p+185,000P=-525 p^{2}+65,326 p-185,000 \quad E=-326 p+185,000P=525p2+65,326p185,000E=326p+185,000. Once annuitized, the number of annuity units does not vary. Post navigation Annuities due are a type of annuity where payments are made at the beginning of each payment period. D) an accounting measure used to determine the contract owner's interest in the separate account. B)part earnings and part cost basis There are two interest rates under fixed annuities. Then find the probability of the event. Registration with FINRA is de facto registration with the SEC; no registration is required by the state banking commission. Distribution can take place before or during any solicitation for sale. A)an accounting measure used to determine the contract owner's interest in the separate account. B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) 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 As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. \hspace{7pt} a. December 303030, to record the payroll. D) 100% tax deferred. 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. This compensation may impact how and where listings appear. In addition, an element of risk must be present. B) payments continue until the death of the primary owner. Supplemental income stream for retirement, not preservation of capital should be the catalyst to consider a VA and for anyone who may need access to the sum invested for any reason a VA would not be considered a suitable recommendation. The following information about the payroll for the week ended December 303030 was obtained from the records of Vienna Co.: Salaries:Deductions:Salessalaries$670,000Incometaxwithheld$198,744Warehousesalaries110,000Socialsecuritytaxwithheld51,714Officesalaries234,000Medicaretaxwithheld15,210$1,014,000U.S. Which of the following statements is not true about the characteristics of a trend? Question #32 of 48Question ID: 606815 D)the rate of return is determined by the underlying portfolio's value. Variable annuities should be considered long-term investments due to the limitations on withdrawals. Reference: 12.3.1 in the License Exam. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. A) II and III. In a variable life annuity with 10-year period certain, a contract holder receives: B) Life annuity. A) partially a tax-free return of capital and partially taxable. A) two people are covered and payments continue until the second death. 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. Variable annuities are designed to combat inflation risk. D) Variable annuity. As part of his profile he stresses that he has had uncomfortable experiences in the past with the stock market and is not inclined to invest in anything that is based on stock market performance and would opt for principal protection instead. \text{Salaries:} && \text{Deductions:}\\ C. III. D)Dow Jones Industrial Average. The remainder of the premium is invested in the separate account. C)I and III. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. If this client is in the payout phase, how would his April payment compare to his March payment? a variable annuity does not guarantee payments for life. D) Joint and last survivor annuity. D) a minimum of 10 years of variable payments, followed by additional variable payments for life A) mutual fund units. Changes in payments on a variable annuity correspond most closely to fluctuations in the: 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 Over the past five years, 's dividend yield has averaged % per year. Question #22 of 48Question ID: 606803 If an insurance holder dies sooner than expected, the insurance company will have to pay the death benefit sooner. Classifying annuities There are many categories of annuities. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 D) I and III. D) Growth mutual funds. Variable annuity salespeople must be registered with FINRA and the state insurance department. CDs insured by the FDIC. The entire amount is taxed as ordinary income. I. She will receive the annuity's entire value in a lump-sum payment. Question #24 of 48Question ID: 606806 Based only on these facts, the variable annuity recommendation is B) II and III. \hspace{10pt} Medicare, 1.5%1.5\%1.5% 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 . 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 is the taxable consequence of this withdrawal to your client? B)cost of living. The number of annuity units is fixed at the time of annuitization. C) a variable annuity contract does not guarantee any type of return These include white papers, government data, original reporting, and interviews with industry experts. An annuity may be purchased under all of the following methods EXCEPT: If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? A variable annuity is both an insurance and a securities product. D) the payout plans provide the client income for life. a variable annuity guarantees payments for life. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. Diagnosis is made by punch biopsy. C) II and IV. Reference: 12.1.2 in the License Exam. B)II and III. The correct answer was: partially a tax-free return of capital and partially taxable. A)Fixed annuity contract with a discussion regarding purchasing power risk B)corporate stock. Question #17 of 48Question ID: 606802 D)the state insurance department. 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. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. The work environment characteristics are normal office conditions. When the first party dies, the annuity payment is made to the survivor. 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? B) II and IV. B)fixed in value until the holder retires. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. 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. Table1. C) II and IV The annuity unit's value represents a guaranteed return. Round to the nearest hundredth of a percentile. Suppose that 20%20 \%20% of their users are United States users who log on daily. These contracts cover both lives and will continue to make payments until the last spouse dies. 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. EEO IS THE LAW . Future annuity payments will vary according to the separate account's performance. However, it does guarantee payments for life (mortality). D)II and III. *During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. The value of accumulation and annuity units varies with the investment performance of the separate account. All of the following are accurate statements to make to the client EXCEPT I. no. continues payments only as long as all annuitants are still alive. 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. Determine whether the following events are independent or dependent. A)accumulation shares. D)I and III. 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:

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