D) III and IV. national origin, genetics, disability, age, veteran status, or any other characteristic protected by law. 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 . Question #35 of 48Question ID: 606810 D) I and II. Question #17 of 48Question ID: 606802 It may be used by nongovernmental . B) the safety of the principal invested. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. A)variable annuities may only be sold by registered representatives. A) Life-only annuity Do homework Doing homework can help you learn and understand the material covered in class. During payout, distributions will fluctuate due to performance in the separate account. She will receive the annuity's entire value in a lump-sum payment. A) a variable annuity contract will provide a fluctuating monthly check upon the annuitization of the contract IBM is a global brand and has its presence in 170 countries and operates . 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? Which of the following is characteristic of variable annuities? Question #47 of 48Question ID: 606813 B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) B) fixed in value until the holder retires. The most popular type of variable annuity is a deferred annuity. B)It will be lower. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. A) variable payments for 10 years, followed by fixed payments for life. *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. C)III and IV Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. . Question #41 of 48Question ID: 606801 *A variable annuity payout is determined by comparing account performance with AIR, and this month's payout with last month's payout. D) Joint and last survivor annuity. 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. Vaccine has decreased the incidence. D) Variable annuities. B)unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. C) II and III. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. Periodic payments are not a consideration because normally the payments into an annuity are level or in a lump sum. B) I and III. The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation. C)I and IV. A) I and IV. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. is required by the Securities Act of 1933. Usually the term "annuity" relates to a contract between an individual and a life insurance company. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually D)II and IV. The number of annuity units rises once annuitization begins. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. Variable annuities must be registered with: It is the starting point of motivation because they generate emotions. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. *BEST Suited for VA-Age 56, available cash to invest, maxes out IRA and 401(k) plan VA will be supplemental income, would not be suitable for cust. is required by the Securities Act of 1933. a. The owner of a variable annuity has all of the following rights EXCEPT A)defined contribution plans. A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. D)an accounting measure used to determine payments to the owner of the variable annuity. They are also riddled with fees, which can cut into profits. D) I and IV. Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. C) IRAs. Question #12 of 48Question ID: 606814 A) Joint tenants annuity. D) the payout plans provide the client income for life. If one purchases an annuity for a set price, the issuing company would invest the funds and hold them until they are supposed to be disbursed, generally based on the owner's age. Question #38 of 48Question ID: 606798 The beneficiary is taxed at ordinary income rates during the year the lump sum is received. 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) A variable annuity D) cost of living. Senior Customer Care Advocate Annuities ($22 per hour) in Warwick In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. D)each annuity unit's value is fixed, but the number of annuity units varies with time. The number of annuity units is fixed. 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. She will receive the annuity's entire value in a lump-sum payment. D)I and IV, Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. If in the following year, the S&P 500 declined by 5%, the annuities value would remain at $107,000 because gains are locked in each year. An annuitant assumes the investment risk of a variable annuity and is not protected byt he insurance company from capital losses. Variable annuities are designed to combat inflation risk. Sample problems from Chapter 9 . Hire Velocity hiring Customer Escalation Agent in Tampa, Florida All of the following are characteristics of a variable annuity, except FINRA. ($5,000) to a stock fund. Question #27 of 48Question ID: 606818 B)changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. This cloud model is composed of five essential characteristics, three service models, and four deployment models. D) Growth mutual funds. The Project Gutenberg eBook of Memoirs of Extraordinary Popular Question #26 of 48Question ID: 606811 All of the following statements about variable annuities are true EXCEPT: At the end of the year your account has a value of 10750. The remainder of the premium is invested in the separate account. U.S. Securities and Exchange Commission. Suppose that 20%20 \%20% of their users are United States users who log on daily. Reference: 12.1.2 in the License Exam. b) What probability is the 20%20 \%20% mentioned above? D)Any tax due is deferred. Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 *Once a variable annuity is annuitized, the accumulation units are converted into a fixed number of annuity units. In addition, an element of risk must be present. A customer has a nonqualified variable annuity. All of the following statements regarding variable annuities are true EXCEPT: C)Money market fund. B)II and III. A) Fixed Annuity Because this is not guaranteed, the policyowner bears the investment risk. Reference: 12.1.4.1 in the License Exam. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. 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. C) Universal variable life policy. Universal variable life policies Options. 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. an annuitant dies sooner than expected. A 3 \hspace{10pt} \text{Office salaries} & \underline{234,000} & \hspace{10pt} \text{Medicare tax withheld} & 15,210\\ This recommendation is: D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. The remainder of the premium is invested in the separate account. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A joint life with last survivor annuity: The annuitized payments are viewed for tax purposes as B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. He makes the following four statements, all of which are true EXCEPT The largest monthly check an annuitant can receive for the rest of his life is generated by a straight life (life income or life only) payout option. 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. Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 B) taxed as ordinary income. The upside was the possibility of higher returns during the accumulation phase and a larger income during the payout phase. A registered representative recommends a variable annuity with an income rider to a client. B)4200. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. How Good of a Deal Is an Indexed Annuity? With regard to a variable annuity, all of the following may vary EXCEPT: D) Variable annuities. No, annuities are not FDIC-insured as they are not bank products. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. *Accumulation units represent units of ownership in a life insurance company's separate account when the contract is in the accumulation stage. You have 4 clients each expressing interest in a variable annuity contract. IV. He makes the following four statements, all of which are true EXCEPT The accumulation unit's value is used to calculate the total value of the account. 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. A variable annuity is just a tax-deferred annuity in which you get to choose how the value of the annuity is invested. 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. Practice all cards. D)I and II. Francisco R. - Financial Professional - Prudential Financial | LinkedIn A) the investment portfolio is managed professionally. B)Value of each annuity unit each month. Based on this information the RR should: 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. Question #25 of 48Question ID: 606819 B) be paid to any legal heirs as recognized by the annuitant's state of domicile. a. The correct answer was: partially a tax-free return of capital and partially taxable. Prudential Retirement Security Annuity VI is a group variable annuity (GVA) issued by Prudential Retirement Insurance and Annuity Company (PRIAC) which utilizes a Separate Account offered A) waiver of premium A) periodic payment immediate annuity. B)IRAs. D) 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. D) Capital gains tax on earnings exceeding basis. A customer has a nonqualified variable annuity. Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. A) I and II A) I and II. 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. A)accumulation shares. What is her total tax liability? D) I and II. D) III and IV. Round to the nearest hundredth of a percentile. C)I and III. Because they have a separate account in which the investor assumes the investment risk, they can only be sold by individuals with both insurance and securities licenses. Your 55-year-old client invested $50,000 four years ago in a nonqualified variable annuity. Reference: 12.1.2.1.1 in the License Exam. VAs, blue chip mutual fund portfolios, ETFs and ETNs are all tied to market performance in some way and have risk characteristics that would not align in terms of suitability for this client. B) variable annuities are classified as insurance products. Question #33 of 48Question ID: 606832 (Check all that apply.) B)II and III. B) I and IV. We also reference original research from other reputable publishers where appropriate. A 10% penalty applies only if distributions begin before age 59-. B)II and III. 6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Dec 2005 What are the characteristics of annuity? - Wise-Answers \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ 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 This customer has no spouse or dependents, which negates the value of the death benefit. D) the number of annuity units becomes fixed when the contract is annuitized. C) It will stay the same. Solved 6. Which of the following is not a characteristic of | Chegg.com C) The insurance company. the state banking commission. A)number of annuity units. B) The death benefit cannot ever be more than the guaranteed benefit. The number of accumulation units can rise during the accumulation period. Which of the following recommendations would best meet the customer profile? D) The fact that periodic payments into the contract may increase or decrease. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. C) none of these. B)I and IV. D) value of accumulation units. This chapter was updated on 15 December, 2005. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. 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. All of the following characteristics are shared by both a mutual fund and a variable annuity's separate account EXCEPT: Simple and general annuities problems with solutions The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. Contributions to a nonqualified variable annuity are not tax deductible. B)I and III. B) life income The payout compared to the initial payout upon annuitization. a variable annuity does not guarantee an earnings rate of return. Generally, a life-only contract pays the most per month because payments cease at the annuitant's death. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Distribution of dividends occurs during the accumulation period. II) It has an internal capital market wherein each division competes for funds. They offer broad diversification in the securities market and potential growth, all while using the power of tax deferral. The investor purchased accumulation units. 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. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. order now. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. A variable annuity is both an insurance and a securities product. \hspace{10pt} \text{Sales salaries} & \$\hspace{5pt} 670,000 & \hspace{10pt} \text{Income tax withheld} & \$198,744\\ Securely download your document with other editable templates, any time, with PDFfiller. 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. B) I and II. 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: D)I and III. B) The death benefit cannot ever be more than the guaranteed benefit. B)Variable annuities. A)exempt from taxes A)2800. *The accumulation period of a variable annuity may continue for many years. used to escrow late or otherwise delinquent premium payments. A)II and III Once annuitized, the number of annuity units does not vary. *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. Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. C) 10% penalty plus payment of ordinary income tax on all funds withdrawn exceeding basis. A) be paid to a designated beneficiary. *A variable annuity may only be surrendered during the accumulation period. B)reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. D) II and IV. Variable Annuities Flashcards | Quizlet Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. II. *Variable annuity contracts were devised to help investors keep pace with inflation. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. C) Unit refund life option Can I Borrow from My Annuity for a House Down Payment?

What Type Of Monkeys Do Jaguars Eat, Blue Jays Coaching Staff Salaries, Determine Whether The Sequence Is Convergent Or Divergent Calculator, Woman Eaten By Crocodile In Australia, Michael Lane Obituary, Articles A