a variable annuity has which of the following characteristics
a variable annuity has which of the following characteristics
Frequently Asked Questions Anti-Money Laundering Program and Suspicious C)number of accumulation units. A demonstrated ability to quickly learn and continuously develop functional knowledge and an understanding of company products as well as administrative, claims, underwriting and marketing functions. A trend makes considerable influence or impact. A) It will be higher. *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. C)It will be higher. Variable annuities are designed to combat inflation risk. 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. Question #22 of 48Question ID: 606803 The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. A) defined contribution plans. B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. 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. B) The policyowner. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. 8 annuities provide a guaranteed rate of return, whereas annuities provide conservative to aggressive investments whose rates of return are not guaranteed. The fees on variable annuities can be quite hefty. used for the investment of funds paid by contract holders. A)Purchasing power risk. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. C) 3800. Reference: 12.3.2.1 in the License Exam. The wage for applicants for this position is $45,979.00 per year. A) The entire amount is taxed as ordinary income, because it is not life insurance. A registered representative recommends a variable annuity with an income rider to a client. A) mortality guarantee. A 1 The applicant and possibly the agent initial any changes made. D) Age 27, saving for first home. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. *Distributions from a nonqualified plan represent both a return of the original investment made in the plan with after-tax dollars (a nontaxable return of capital) and the income from that investment. C) II and IV. A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as B) variable annuities. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children MetLife, Inc. Senior Customer Care Advocate Annuities ($22 per hour Life Insurance vs. Annuity: What's the Difference? B) Life annuity. withdraw funds without any tax consequences. D) the payout plans provide the client income for life. who needs access to the sum invested at later time. a variable annuity does not guarantee payments for life. B) II and III. Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. Options. Question #11 of 48Question ID: 606816 A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. A) a minimum rate of return is guaranteed. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract C)I and III. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. D) cost of living. Question #16 of 48Question ID: 606807 Vaccine has decreased the incidence. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. 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. Portfolio Compliance Risk Analyst Job in Newark, NJ at Prudential Reference: 12.1.4 in the License Exam. must precede every sales presentation. How Are Nonqualified Variable Annuities Taxed? A) a minimum rate of return is guaranteed. 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. The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation. B) variable annuities are classified as insurance products. Premiums made into the annuity purchase accumulation units. Job Classification: Corporate - Legal and Compliance. Which is it? Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. The separate account is NOT likely to invest in: An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is: D) Growth mutual funds. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. About Us Fixed Annuity, Retirement Annuities: Know the Pros and Cons. 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. 5 Q All of the following are characteristics of variable whole life EXCEPT the premium is level there is no guaranteed cash value there is no guaranteed minimum death benefit. D)0. Variable annuities gave buyers a chance to benefit from rising markets by investing in a menu of mutual funds offered by the insurer. 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 . All of the following are characteristics of a variable annuity, except: a. Designed to protect against inflation. Fixed annuities typically earn at a lower, stable rate. Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. 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. If the customer takes a withdrawal of $10,000, what are the tax consequences? *Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. A)Fixed annuity contract with a discussion regarding purchasing power risk The most suitable option and one considered effective for married couples is a single joint and last survivor contract. Describe. Distribution of dividends occurs during the accumulation period. Annuity units are units of ownership when the contract is in the payout stage. Variable Annuities | Investor.gov B) II and III A) Life-only annuity C) none of these. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. D) I and II. must precede every sales presentation. The number of annuity units rises once annuitization begins. D)the state insurance department. Question #29 of 48Question ID: 606831 A)II and III. D)I and III. A) The fact that the annuity payment may increase or decrease. D)the safety of the principal invested. Can I Borrow from My Annuity for a House Down Payment? 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. A registered representative recommends a variable annuity with an income rider to a client. An annuity is an agreement for one person or organization to pay another a series of payments. A Variable Annuity Has Which of the Following Characteristics *A variable annuity may only be surrendered during the accumulation period. C)III and IV A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. John is the annuitant in a variable plan, and Sue is the beneficiary. B) the number of annuity units is fixed, and their value remains fixed. D) I and IV. C. A) periodic payment immediate annuity. But again, the need to designate beneficiaries is not an issue for this annuitant. Reference: 12.1.2.1.2 in the License Exam. The value of these units varies with the performance of the separate account. Surrender fees and penalties for early withdrawal. Which 2 of the 4 client profiles would a VA be LEAST suitable for? II) It has an internal capital market wherein each division competes for funds. If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? \hspace{10pt} \text{Sales salaries} & \$\hspace{5pt} 670,000 & \hspace{10pt} \text{Income tax withheld} & \$198,744\\ Determine whether the following events are independent or dependent. The separate account is NOT likely to invest in: Investopedia does not include all offers available in the marketplace. C) be returned to the separate account. A) I and III. PDF The NIST definition of cloud computing Question #47 of 48Question ID: 606813 B) life income A) I and III. *Annuity death benefits are generally paid in a lump sum. can be sold by someone with only an insurance license C) Mutual fund portfolio consisting of blue chip stocks The growth portion is subject to a 10% penalty. This guideline has been prepared for use by Federal agencies. Most annuities will not allow you to withdraw additional funds from the account once the payout phase has begun. A) the investment portfolio is managed professionally. must provide full and fair disclosure. Both products typically have a wide range of options across equities, bonds and money market instruments. B) the client may vote for the board of directors or board of managers. Classifying annuities There are many categories of annuities. This makes a total of $4,000 tax and penalty paid on the random withdrawal. The distribution of questions by topic is not intended to represent the 39) A variable annuity has the following guarantees: [PDF] Understanding your variable annuity UBS Variable annuities are long-term investment vehicles that with these securities as well insurance company and do not apply to the investment 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) mortality guarantee. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. C)Keogh plans. B)100% taxable. C) II and IV. The original investment has grown to a value of $60,000. B)I and III. D) Two-thirds of the withdrawal is taxable as ordinary income. A)the yield is always higher than mortgage yields. 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) each annuity unit's value is fixed, but the number of annuity units varies with time. No, annuities are not FDIC-insured as they are not bank products. During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. D)suitable due to the relative safety of the investment. 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. The growth portion is taxed as a capital gain. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. 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. The payout compared to the initial payout upon annuitization. B)mutual fund units. A)variable annuities may only be sold by registered representatives. Simple and general annuities problems with solutions 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. Which of the following is characteristic of variable annuities? A universal variable life policy should be purchased primarily for its insurance features, not its investment features. Which of the following is not a characteristic of a program module? In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. I. Are Variable Annuities Subject to Required Minimum Distributions? *Variable annuity contracts were devised to help investors keep pace with inflation. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: a variable annuity does not guarantee payments for life. IBM is a global brand and has its presence in 170 countries and operates . B)Value of each annuity unit each month. 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. He makes the following four statements, all of which are true EXCEPT Upon John's death during the accumulation period, Sue takes a lump-sum payment. She will receive the annuity's entire value in a lump-sum payment. IBM is a global brand and has its presence in 170 countries and operates . The annuitant may not contribute and withdraw simultaneously. Which of the following statements regarding variable annuities are TRUE? Variable annuity salespeople must be registered with FINRA and the state insurance department. C) early annuity phase-in However, the web version (cat. 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 Guaranteed Lifetime Annuity: How They Work, When They Pay You, This is also generally true of retirement plans. Based on the clients profile which of the following would be the best recommendation? *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. A) I and IV. a. Reference: 12.3.3 in the License Exam. However, because the client is not yet age 59- when making the withdrawal, he also pays a 10% penalty, or $1,000. The paper publication will not be rereleased. A) two people are covered and payments continue until the second death. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. D) the yield is always higher than mortgage yields. What Are the Biggest Disadvantages of Annuities? U.S. Securities and Exchange Commission. A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic pay- ments to you, beginning either immediately or at some future date. One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur. Question #37 of 48Question ID: 606817 *As contributions are made with after-tax dollars, only the earnings generated are taxed on withdrawal. A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. If the client, who is in a 30% tax bracket, makes a random withdrawal of $15,000, what will the tax liability to the IRS be? A security is any investment for profit with management performed by a third party. B) 100% taxable. An accumulation unit in a variable annuity contract is: B) I and IV. A) Ordinary income tax on earnings exceeding basis. a. it performs a single task b. it is self-contained and independent of other modules c. it is relatively short d. all of the above are chamcleristics of a program module 7. With regard to a variable annuity, all of the following may vary EXCEPT: 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. A) variable payments for 10 years, followed by fixed payments for life. *A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant.