a variable annuity has which of the following characteristics a variable annuity has which of the following characteristics

*Accumulation units represent units of ownership in a life insurance company's separate account when the contract is in the accumulation stage. *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. must precede every sales presentation. It was a lump-sum purchase. A) a minimum rate of return is guaranteed. D) III and IV. Once a customer annuitizes a variable annuity, which of the following statements are TRUE? Question #25 of 48Question ID: 606819 A registered person recommends the purchase of a variable annuity to one of his clients. D) There is no guarantee regarding the investment results of the separate account. There is a guaranteed minimum interest rate, normally amounting to between 1 and 3 percent. A) A variable annuity A)an accounting measure used to determine the contract owner's interest in the separate account. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). How is the distribution taxed? D) periodic payment deferred annuity. A) a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero 111. D) expense guarantee. B)unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. Based only on these facts, the variable annuity recommendation is C) a variable annuity contract does not guarantee any type of return C)the number of annuity units is fixed, and their value remains fixed. C)not suitable because a lifetime income rider is only for someone who is already retired 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. are purchased primarily for their insurance features B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. Annuity death benefits are generally paid in a lump sum. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. Which of the following is not a characteristic of a program module? D) variable annuities may only be sold by registered representatives. C) Tax-free municipal bonds Income that cannot be outlived by the owner Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). Reference: 12.3.3 in the License Exam. C) the client assumes the investment risk. Based on the information given in the question, the VA recommendation would not be suitable. 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: *Contributions to a nonqualified variable annuity are not tax deductible. The value of the annuity units is fixed. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. B) The policyowner. During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. required to be located off of the company's premises. You can buy an annuity with either a lump sum or a series of payments, and the accounts value will grow accordingly. D) a minimum of 10 years of variable payments, followed by additional variable payments for life. C)Mortality risk. A)II and III A) Fixed Annuity A Variable Annuity has which of the following characteristics? During the accumulation phase, you make purchase payments. 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. savingsbonds30,420Groupinsurance45,630$341,718\begin{array}{lrlr} Each of the remaining statements are true. 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 . must provide full and fair disclosure. The growth portion is taxed as a capital gain. D) Keogh plans. A)defined contribution plans. Once annuitized, the number of annuity units does not vary. 2019 Ted Fund Donors 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. B)a minimum rate of return is guaranteed. Job Classification: Corporate - Legal and Compliance. Which of the following is NOT an accurate statement concerning a variable life insurance contract? When the first party dies, the annuity payment is made to the survivor. The growth portion is subject to a 10% penalty. 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)I and IV. A) Ordinary income tax on earnings exceeding basis. Final answer. Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 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. D) Variable annuities. A) number of annuity units. IV. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. Based on the clients profile which of the following would be the best recommendation? C) payments continue for a pre-determined period of time. 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. A) defined contribution plans. C)the SEC. 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. \hspace{10pt} Social security, 6%6\%6% on first $100,000\$100,000$100,000 of employee annual earnings It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. must be filed with FINRA. Here is how guaranteed lifetime annuities work. Question #44 of 48Question ID: 606797 C)Variable annuity contract with a discussion regarding interest rate risk II. A) variable payments for 10 years, followed by fixed payments for life. 's dividend yield was % last year. 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. These contracts cover both lives and will continue to make payments until the last spouse dies. 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. Therefore, ordinary income taxes will apply to the entire $10,000. C)Growth mutual funds 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 Round to the nearest hundredth of a percentile. Distributions from nonqualified variable annuities are: C) insurance companies keep variable annuity funds in separate accounts from other insurance products. 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 separate account performance compared to an assumed interest rate. No software installation. A) I and IV. IBM Noida, Uttar Pradesh, India4 weeks agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. II. 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. Reference: 12.3.3 in the License Exam. C)municipal bonds. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. For a retired person, which of the following investments would provide the greatest protection against inflation? A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. a variable annuity guarantees payments for life. If you need to withdraw money from the account because of a financial emergency, you may face surrender fees. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. As with all tax-deferred accounts, municipal bonds are not appropriate investments because interest earned on municipals is already tax exempt at the federal level. D) Variable annuities. b. ($5,000) to a stock fund. If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. A) Only during the payout period. Reference: 12.3.3 in the License Exam. A) I and III. When may a variable annuity account be surrendered? A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as A) I and II C) be returned to the separate account. B) life income 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. *Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Annuities due are a type of annuity where payments are made at the beginning of each payment period. A) mutual fund units. D) accumulation shares. A) I and III. All of the following statements about variable annuities are true EXCEPT: A) III and IV. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. C) Unit refund life option Question #42 of 48Question ID: 606830 A) I and II 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. A) Dow Jones Industrial Average. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. *During the accumulation phase, the number of accumulation units will increase as additional money is invested. A) periodic payment immediate annuity. *The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. \text{Salaries:} && \text{Deductions:}\\ Annuity units are units of ownership when the contract is in the payout stage. do not have a separate account D) It cannot be determined until the April return is calculated. Fixed annuities are not considered securities as return is guaranteed by the insurance company issuer. How Good of a Deal Is an Indexed Annuity? Diagnosis is made by punch biopsy. D) payments continue until age 70-. a) What percentage of Facebook's users are from the United States? A) Life-only annuity With regard to a variable annuity, all of the following may vary EXCEPT: A guaranteed lifetime annuity promises to pay the owner an income for the rest of their life. B)reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. Variable annuities should be considered long-term investments due to the limitations on withdrawals. What Are the Biggest Disadvantages of Annuities? A customer is receiving annuitized payments from a variable annuity. must precede every sales presentation. Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Eric W. Noreen, Peter C. Brewer, Ray H Garrison. U.S. Securities and Exchange Commission. D) minimum guaranteed death benefit. During the accumulation phase, the number of accumulation units will increase as additional money is invested. Expert Answer. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. The investor purchased accumulation units. U.S. Securities and Exchange Commission. Are Variable Annuities Subject to Required Minimum Distributions? C) II and IV. Designed to protect against inflation. A) A 75 year old women, who is a former executive retired for over ten years who wants to preserve as much capital as she can to leave to her two grandchildren. How is the distribution taxed? The tax on this is $2,800 ($10,000 x 28%). Sample problems from Chapter 9. . D) III and IV. With variable annuities policyholders can choose from a number of investment opportunities. Similarly, CDs are insured, thereby eliminating risk and guaranteeing a return. Are There Penalties for Withdrawing Money From Annuities? As of March 03, 2023, had a relative dividend yield of % compared to the industry median of %. B) the safety of the principal invested. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. must be filed with FINRA. However, they are protected by state guaranty associations in the event that the insurance company providing the product goes out of business. A)variable annuities will protect an investor against capital loss. *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. C)Keogh plans. As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. a life insurance holder lives longer than expected. Full-Time. Life Insurance vs. Annuity: What's the Difference? A customer, who has contributed to an IRA and to an employer matching 401(k) plan continuously for many years, wants to purchase an annuity contract to add additional monthly income once retired. Question #28 of 48Question ID: 606821 C) The investor's concerns about taxes. b. Can I Borrow from My Annuity for a House Down Payment? C) It will stay the same. who needs access to the sum invested at later time. The payout compared to last month's payout. "Variable Annuities: What You Should Know," Page 6. He makes the following four statements, all of which are true EXCEPT Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies. C) 3000. B) During the accumulation period. B)mutual fund units. Reference: 12.3.1 in the License Exam, Question #30 of 48Question ID: 606833 C) II and IV. Distribution can take place before or during any solicitation for sale. "Variable Annuities: What You Should Know," Page 10. A client has purchased a nonqualified variable annuity from a commercial insurance company. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. D)the safety of the principal invested. A)variable annuities may only be sold by registered representatives. In addition, an element of risk must be present. Variable annuities involve underlying equity investments in a separate account. A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units. *A variable annuity may only be surrendered during the accumulation period. Reference: 12.3.3 in the License Exam. Which 2 of the 4 client profiles would a VA be LEAST suitable for? Universal variable life policies Reference: 12.3.1 in the License Exam. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. A) an accounting measure used to determine payments to the owner of the variable annuity. When the first party dies, the annuity payment is made to the survivor. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. B)Tax-free municipal bonds C) During the annuity period. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. Periodic payments are not a consideration because normally the payments into an annuity are level or in a lump sum. They are more suitable for individuals who can fund the annuity with cash, want to supplement existing retirement benefits they have already funded, are comfortable with the market risk associated with a VA separate account portfolio and anticipate a long retirement. B) I and IV. The time period depends on how often the income is to be paid. During the . *Annuity death benefits are generally paid in a lump sum. C) such an annuity is designed to combat inflation risk. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Reference: 12.3.2.1 in the License Exam. D) not suitable because a lifetime income rider is only for someone who is already retired. the state banking commission. On an annual basis, the machine will produce 20,000 units with an expected selling price of $10, prime costs of$6 per unit, and a fixed cost allocation of $3 per unit. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. Reference: 12.1.2.1.1. in the License Exam. Deferred Annuity Definition, Types, How They Work, What Is a Fixed Annuity? The payout compared to the initial payout upon annuitization. Reference: 12.2.1 in the License Exam. C) 3800. B)I and IV. (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. Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. lse economics offers 2021 student room, recent arrests in payson, az,