B)100% taxable. II. When money is deposited into the annuity, it is purchasing accumulation units. To comply with Regulation SP, a brokerage firm is required to do all of the following EXCEPT: A) deliver an annual notice of its information collecting and sharing policies to all customers. This guideline has been prepared for use by Federal agencies. A. The accumulation period of a variable annuity may continue for many years. Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. D) Variable annuities. A trend makes considerable influence or impact. Based on the information given in the question, the VA recommendation would not be suitable. FINRA. D) The fact that periodic payments into the contract may increase or decrease. 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. Once annuitized, the number of annuity units does not vary. B) I and III. B)Tax-free municipal bonds C)Corporate bonds. This would not align with the couple's criteria for coverage as long as they both live. 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. Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. The entire amount is taxed as ordinary income. Immediate life annuity. Variable Annuities. It was a lump-sum purchase. B) II and IV. An investor who has purchased a nonqualified variable annuity has the right to: Variable annuities must be registered with: All of the following statements concerning a variable annuity are correct EXCEPT: D) variable annuities will protect an investor against capital loss. The growth portion is subject to a 10% penalty. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement A) The fact that the annuity payment may increase or decrease. The time period depends on how often the income is to be paid. C) 3800. Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. B)IRAs. regulated under both securities and insurance laws. An individual retirement annuity is an investment vehiclesimilar to an individual retirement accountthat is offered by insurance companies. A) The fact that the annuity payment may increase or decrease. 111. The number of annuity units is fixed at the time of annuitization. can be sold by someone with only an insurance license a variable annuity guarantees an earnings rate of return. an annuitant dies sooner than expected. Suppose that 20%20 \%20% of their users are United States users who log on daily. A joint-and-last-survivor annuity is a payout option where: B)a minimum rate of return is guaranteed. For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. An individual who purchases a Life annuity is given protection against: the risk of living longer than expected The type of annuity that can be purchased with one monetary deposit is called a (n) Immediate annuity N purchases an annuity by making payments in an amount no less than $100 quarterly. Question #12 of 48Question ID: 606814 The figure below illustrates a six-month annuity with monthly payments. B) the state insurance department. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. C) Unit refund life option The growth portion is taxed as a capital gain. B)Universal variable life policy. D) cost of living. How Good of a Deal Is an Indexed Annuity? When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. 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. Changes in payments on a variable annuity correspond most closely to fluctuations in the: An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. 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. D) variable annuities may only be sold by registered representatives. B) IPO. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. 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. However, if you take a withdrawal during the contractssurrender period, which can be as long as 15 years, youll generally have to pay a surrender fee. A) variable annuities offer the investor protection against capital loss. Over the past five years, 's dividend yield has averaged % per year. Herpes Zoster has all of the following characteristics except: Group of answer choices. *Annuity death benefits are generally paid in a lump sum. "Variable Annuities: What You Should Know," Page 6. 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. IV. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. The value of the separate account is now $30,000. During payout, distributions will fluctuate due to performance in the separate account. Of the 4 client profiles below, which might be the best suited for a variable annuity recommendation? vote for the investment adviser. 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 C) The insurance company. A 10% penalty applies only if distributions begin before age 59-. *Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. The number of annuity units rises once annuitization begins. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. Annuities due are a type of annuity where payments are made at the beginning of each payment period. A variable annuity is a security and must be registered with the SEC, not FINRA. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. All of the following statements about variable annuities are true EXCEPT: C) insurance guarantee. Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually Which of the following is NOT an accurate statement concerning a variable life insurance contract? A) a minimum rate of return is guaranteed. must precede every sales presentation. 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. C)Money market fund. EEO IS THE LAW . C) II and IV. D) I and II. $63,000 b.$51,000 c. $18,000 d.$6,000. Fixed annuities typically earn at a lower, stable rate. D)I and III. C)III and IV. IV. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed A)value of underlying securities held in the separate account. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. During the accumulation phase, you make purchase payments. The number of accumulation units is always fixed throughout the accumulation period. C) 10% penalty plus payment of ordinary income tax on all funds withdrawn exceeding basis. When the annuitization option is selected, each payment represents both capital and earnings. D)It cannot be determined until the April return is calculated. A) II and IV. Question #15 of 48Question ID: 606804 D) The investment risk is shared between the insurance company and the policyowner. A 1 The applicant and possibly the agent initial any changes made. Transcribed image text: 6. *Variable annuity contracts were devised to help investors keep pace with inflation. All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. B) the safety of the principal invested. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. Sample problems from Chapter 9 . She will receive the annuity's entire value in a lump-sum payment. 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. Based only on these facts, the variable annuity recommendation is C) III and IV. An investor who purchases a fixed annuity contract assumes purchasing-power risk. A) I and III. Which of the following recommendations would best meet the customer profile? If the account is annuitized, the investor has chosen a payout option. A registered representative recommends a variable annuity with an income rider to a client. C)the SEC. The number of annuity units is fixed. In the case of deferred annuities, this is often referred to as the accumulation phase. *An immediate annuity has no accumulation period. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. d) What is the probability that a user is from the United States, given that he or she logs on every day? Clusters of vesicles in various stages. *Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Therefore, ordinary income taxes will apply to the entire $10,000. In addition, an element of risk must be present. The upside was the possibility of higher returns during the accumulation phase and a larger income during the payout phase. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Question #13 of 48Question ID: 606822 For a retired person, which of the following investments would provide the greatest protection against inflation? The number of accumulation units is always fixed throughout the accumulation period. C) I and III. C) During the annuity period. Full-Time. Essential Characteristics: B) During the accumulation period. D)the state insurance department. Single payment deferred annuity. A) I and II 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. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. But again, the need to designate beneficiaries is not an issue for this annuitant. This annuity is nonqualified, which means the client has paid for it with after-tax dollars and has a basis equal to the original $29,000 investment. I. Can I Borrow from My Annuity for a House Down Payment? However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. About Us A)There is no tax as the withdrawal is considered return of capital. If you need to withdraw money from the account because of a financial emergency, you may face surrender fees. If the separate account of a variable annuity with an AIR of 4% had actual net earnings of 8% in March, the April payment will be higher than the March payment. The annuitant may not contribute and withdraw simultaneously. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. C)municipal bonds. With variable annuities policyholders can choose from a number of investment opportunities. A Variable Annuity has which of the following characteristics? Question #22 of 48Question ID: 606803 As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but theres also a risk that the account will fall in value. 222. C) value of underlying securities held in the separate account. B)I and III. must provide full and fair disclosure. A) Ordinary income tax on earnings exceeding basis. Therefore, ordinary income taxes will apply to the entire $10,000. A) I and III. D) I and IV. C)I and IV. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. What is the taxable consequence of this withdrawal to your client? *Contributions to a nonqualified annuity are made with the owner's after-tax dollars. A)defined contribution plans. A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. Underlying equity investments T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. She will receive the annuity's entire value in a lump-sum payment. D)Variable annuity. U.S. Securities and Exchange Commission. *The customer, in the accumulation stage of the annuity, is holding accumulation units. The accumulation unit's value is used to calculate the total value of the account. A) I and III. 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. 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 An annuity may be purchased under all of the following methods EXCEPT: The AG49-A Revisions IBM Noida, Uttar Pradesh, India4 weeks agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. 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. Bear in mind that between the numerous feessuch as investment management fees,mortality fees, and administrative feesand charges for any additional riders, a variable annuitysexpenses can quickly add up. B) Life annuity with period certain C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. C) Life annuity with period certain. 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. 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. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. A)II and IV. A variable annuity's separate account is: A separate account will invest in a number of different securities. A)the yield is always higher than mortgage yields. *Contributions to a nonqualified variable annuity are not tax deductible. A)III and IV. C)II and IV. (primary needs). As the name implies, the investment performance of a variable annuity's portfolio (separate account) can vary, and the investor bears the risk of any potential decline in its value. C) It will stay the same. Reference: 12.1.2.1.2 in the License Exam. C)insurance companies keep variable annuity funds in separate accounts from other insurance products. C) 10 years of variable payments. Your customer in his early 30s has received a modest inheritance from a relative. Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. D)money market funds. Securely download your document with other editable templates, any time, with PDFfiller. These contracts come with high surrender charges. How to Navigate Market Volatility While Saving for Retirement, Variable Annuity: Definition and How It Works, Vs. *Only variable annuities have payout plans that provide the client income for life. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. A)the state banking commission. Question #19 of 48Question ID: 606826 A variable annuity is just a tax-deferred annuity in which you get to choose how the value of the annuity is invested. A) Ordinary income tax on earnings exceeding basis. D) value of accumulation units. C)not suitable because a lifetime income rider is only for someone who is already retired B) be paid to any legal heirs as recognized by the annuitant's state of domicile. D) Life annuity with 10-year period certain. Here is how guaranteed lifetime annuities work. If your 60-year-old customer purchases a nonqualified variable annuity and withdraws some of her funds before the contract is annuitized, what are the consequences of this action? A) the investment portfolio is managed professionally. 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? Changes in payments on a variable annuity correspond most closely to fluctuations in the: B) fixed in value until the holder retires. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased.

Dylan Stephens Rawso, Has It Ever Snowed In Ravenshoe, Subsidence In Terraced Houses, Articles A