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used for the investment of funds paid by contract holders. You can tailor the income stream to suit your needs. Once a variable annuity has been annuitized: C) early annuity phase-in B) I and IV. During the accumulation phase, you make purchase payments. *A variable annuity may only be surrendered during the accumulation period. used to escrow late or otherwise delinquent premium payments. A 45-year-old employed individual with no other retirement accounts in place The customer, in the accumulation stage of the annuity, is holding accumulation units. a life insurance holder dies sooner than expected. A trend is formed from non-repetitive actions of people. D) There is no guarantee regarding the investment results of the separate account. A)II and IV. On any device & OS. Do homework Doing homework can help you learn and understand the material covered in class. C) It will stay the same. who needs access to the sum invested at later time. A)100% tax free. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? *Only variable annuities have payout plans that provide the client income for life. 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. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. D) each annuity unit's value varies with time, but the number of annuity units is fixed. \text{Salaries:} && \text{Deductions:}\\ A variable annuity is a tax-deferred retirement vehicle that allows you to choose from a selection of investments and then pays you a level of income in retirement that is determined by the performance of the investments you choose. IBM Noida, Uttar Pradesh, India1 month agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. C)annuity units. A) waiver of premium A) a minimum rate of return is guaranteed. 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. Reference: 12.1.2.1.1. in the License Exam. A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. (The exception is the fixed income annuity, which has a moderate to high payout that rises as the annuitant ages). B)variable annuities are classified as insurance products. A)an accounting measure used to determine the contract owner's interest in the separate account. order now. Based on this information the RR should: Reference: 12.3.1 in the License Exam. a variable annuity guarantees an earnings rate of return. A)accumulation shares. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? an annuitant lives longer than expected. A)IPO. B) fixed in value until the holder retires. Reference: 12.1.2.1.1 in the License Exam. A) partially a tax-free return of capital and partially taxable. 222. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? C)Variable annuity contract with a discussion regarding interest rate risk D) None, because it is the proceeds from a life insurance company. They are also not considered suitable for anyone who anticipates needing a lump sum within a short time frame to fund other endeavors. C)I and III. If the annuitant should die during that time, any death benefit would be paid to a beneficiary designated by the annuitant at the time the annuity was purchased. D) I and III Based on the clients profile which of the following would be the best recommendation? C) III and IV. D) Joint and last survivor annuity. The annuity unit's value represents a guaranteed return. Securely download your document with other editable templates, any time, with PDFfiller. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. He makes the following four statements, all of which are true EXCEPT C) such an annuity is designed to combat inflation risk. 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. Simple and general annuities problems with solutions An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. D) II and III. Which of the following is NOT an accurate statement concerning a variable life insurance contract? D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. III) A hierarchy of corporate staff evaluates divisions' plans and performance. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. Reference: 12.1.4 in the License Exam. Policyholders . An accumulation unit in a variable annuity contract is: A)an accounting measure used to determine the contract owner's interest in the separate account. Chapter 12 - Variable Annuities Flashcards | Chegg.com However, the web version (cat. She will receive the annuity's entire value in a lump-sum payment. 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. Expert Answer. III. A registered representative recommends a variable annuity with an income rider to a client. Question #36 of 48Question ID: 606805 A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. Reference: 12.1.4.1 in the License Exam. The funds in an annuity are off-limits to creditors and other debt collectors. Variable Annuity: Definition and How It Works, Vs. Fixed Annuity His objective is monthly income that he can receive after he retires to supplement his small pension and social security benefits. Suppose that 20%20 \%20% of their users are United States users who log on daily. B) I and II. do not have a separate account Determine whether the following events are independent or dependent. The annuity unit's value represents a guaranteed return. 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. 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. 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. D)I and III. \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ The number of annuity units rises once annuitization begins. A) Only during the payout period. 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) Life-only annuity Generally, a life-only contract pays the most per month because payments cease at the annuitant's death. If this client is in the payout phase, how would his April payment compare to his March payment? Your 65-year-old client owns a nonqualified variable annuity. C) The insurance company. C) A 25year old public school teacher who would like to save enough for the purchase of her first home within the next 3 to 5 years. B)mutual fund units. A) mutual fund units. e) Are From the United States and Log on every day independently? Your client owns a variable annuity contract with an AIR of 4%. D) I and IV. IBM hiring Practitioner- Policy Admin in Noida, Uttar Pradesh, India B) I and III. D)Variable annuity contract with a discussion regarding legislative risk, A VA with its investments in the separate account subject to market risk would not align with the customer's objective. B) During the accumulation period. a variable annuity guarantees an earnings rate of return. Distributed along a dermatome. D)an accounting measure used to determine payments to the owner of the variable annuity. Variable Annuities Flashcards | Quizlet 2019 Ted Fund Donors 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. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children C) 3000. Needs - are goal-directed forces that people experience. In the case of deferred annuities, this is often referred to as the accumulation phase. D) Keogh plans. Which is it? For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. D)separate account may consist of mutual funds. The growth portion is taxed as ordinary income. Reference: 12.2.1 in the License Exam. A) The policy provides a minimum guaranteed death benefit. The correct answer was: partially a tax-free return of capital and partially taxable. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. B) the rate of return is determined by the underlying portfolio's value. Sub accounts and mutual funds are conceptually. Table1. Variable Annuity Features | Annuity Guys A deferred annuity is an insurance contract that promises to pay the buyer a regular stream of income, or a lump sum, at some date in the future. b. The noble relatives of the Count d'Horn absolutely blocked up the ante-chambers of the regent, praying for mercy on the misguided youth, and alleging that he was insane . # 7 Annuities Flashcards | Quizlet C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. \end{array} D) I and IV D)I and II. 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: B) variable annuities. Life with period certain will produce a smaller check for life because the insurance company will guarantee payments to a beneficiary for a certain period of time designated in the contract should the annuitant die within that period. What are the characteristics of annuity? - Wise-Answers Reference: 12.3.1 in the License Exam, Question #30 of 48Question ID: 606833 B)I and IV. The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. Annuities basics | III Chapter 12: Variable Annuities Flashcards | Quizlet A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. 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. A)Purchasing power risk. PDF The NIST definition of cloud computing Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. b. 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. 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. How Variable Life Insurance Works: Pros and Cons - ValuePenguin View full document. D)value of accumulation units. externalities. B) I and IV. D) I and II. A) periodic payment immediate annuity. IV. C)Corporate bonds. A) number of annuity units. Surrender fees and penalties for early withdrawal. A) I and IV. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. B) During the accumulation period. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: 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. Guaranteed Lifetime Annuity: How They Work, When They Pay You, This is also generally true of retirement plans. Assuming that the payroll for the last week of the year is to be paid on January 444 of the following fiscal year, journalize the following entries: The number of accumulation units is always fixed throughout the accumulation period. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. D) I and II. A)the state banking commission. Question #15 of 48Question ID: 606804 is required by the Securities Act of 1933. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . A)value of underlying securities held in the separate account. D) I and III. 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. D)partially a tax-free return of capital and partially taxable. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. A) A variable annuity The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. Simple and general annuities problems with solutions A) a minimum rate of return is guaranteed. A)defined contribution plans. Unit 12: Variable Annuities Flashcards | Chegg.com An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. PDF Prudential IncomeFlex Target Vanguard Balanced Index Fund D)the rate of return is determined by the underlying portfolio's value. Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. 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: 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: 6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Dec 2005 Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. A variable annuity is both an insurance and a securities product. One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur. are purchased primarily for their insurance features Only variable annuities have payout plans that provide the client income for life. D) each annuity unit's value varies with time, but the number of annuity units is fixed. With regard to a variable annuity, all of the following may vary EXCEPT: C) 100% tax free. 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. He makes the following four statements, all of which are true EXCEPT Variable annuity salespeople must register with all of the following EXCEPT: A) FINRA. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? D) payments continue until age 70-. *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. A guaranteed lifetime annuity promises to pay the owner an income for the rest of their life. A) 2800. Question #44 of 48Question ID: 606797 If this client is in the payout phase, how would his April payment compare to his March payment? If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. C) number of accumulation units. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. Vaccine has decreased the incidence. A) III and IV. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. D) the yield is always higher than mortgage yields. is required by the Securities Act of 1933. A)II and IV. Which of the following statements regarding variable annuities are TRUE? If the customer takes a withdrawal of $10,000, what are the tax consequences? The value of accumulation and annuity units varies with the investment performance of the separate account. B) The investor's marital status. A) variable payments for 10 years, followed by fixed payments for life. *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.