a variable annuity has which of the following characteristics

IBM is a global brand and has its presence in 170 countries and operates . Question #36 of 48Question ID: 606805 Fixed annuities are not considered securities as return is guaranteed by the insurance company issuer. This recommendation is: Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. In March, the actual net return to the separate account was 8%. None of the other investments listed here offer tax-deferred growth. Annuity death benefits are generally paid in a lump sum. required to be located off of the company's premises. A joint-and-last-survivor annuity is a payout option where: *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. No, annuities are not FDIC-insured as they are not bank products. B) variable annuities. D)variable annuities. IV. *Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. Word bank:Fixed, Variable Fixedannuities provide a guaranteed rate of return, whereas Variableannuities provide conservative to aggressive investments whose rates of return are not guaranteed. Life Insurance vs. Annuity: What's the Difference? Of the four client profiles below which might be the best suited for a variable annuity recommendation? regulated under both securities and insurance laws. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. Which of the following statements regarding variable annuities are TRUE? C) insurance guarantee. Immediate annuities purchase annuity units directly. B)I and III. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? Reference: 12.1.1 in the License Exam. D) not suitable because a lifetime income rider is only for someone who is already retired. B. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: The value of the annuity units varies. 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. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract A)II and IV. A) number of annuity units. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. C)III and IV B) The entire $10,000 is taxable as ordinary income. When may a variable annuity account be surrendered? C) II and III. 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. D) 4500. C) annuity units. C) The investor's concerns about taxes. The customer, in the accumulation stage of the annuity, is holding accumulation units. Reference: 12.3.4 in the License Exam. However, it does guarantee payments for life (mortality). C)earnings only and taxable the state insurance commission. All of the following statements about variable annuities are true EXCEPT: Question #11 of 48Question ID: 606816 A) I and II. D) I and III. 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. must provide full and fair disclosure. They can be classified by: Nature of the underlying investment - fixed or variable \hspace{7pt} a. December 303030, to record the payroll. who needs access to the sum invested at later time. III. The value of a variable annuity is based on the performance of an underlying portfolio of sub accounts selected by the annuity owner. B) I and IV. Immediate life annuity with 10-year period certain. She may choose to receive monthly payments for the rest of her life. C) suitable regardless of funding sources D) I and III. All of the following are characteristics of a variable annuity, except: a. The figure below illustrates a six-month annuity with monthly payments. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. & \underline{\underline{\$1,014,000}} & \hspace{10pt} \text{U.S. savings bonds} & 30,420\\ They offer broad diversification in the securities market and potential growth, all while using the power of tax deferral. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. Once a customer annuitizes a variable annuity, which of the following statements are TRUE? The tax on this is $2,800 ($10,000 x 28%). During payout, distributions will fluctuate due to performance in the separate account. The trial of the assassins commenced on the following day; and the evidence being so clear, they were both found guilty, and condemned, to be broken alive on the wheel. C) value of underlying securities held in the separate account. Question #22 of 48Question ID: 606803 B) the state insurance department. A) periodic payment immediate annuity. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. A) 2800. B)value of annuity units. A)variable annuities may only be sold by registered representatives. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. B)II and III. 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? Job Classification: Corporate - Legal and Compliance. A) I and IV. 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. C) Unit refund life option The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. Rolling two 222s followed by one 666 on three tosses of a fair die, Use the table 1 and table 2 to complete the table 3 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. C) 10 years of variable payments. 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. A) II and IV. Your client has $50,000 to invest. The entire amount is taxed as ordinary income. A)Fixed annuities. C)100% tax deferred. B) Life annuity with period certain The offers that appear in this table are from partnerships from which Investopedia receives compensation. Single payment deferred annuity. 6102..55.001) is being updated on an ongoing basis. A variable annuity has two phases: an accumulation phase and a payout (annuitization) phase. *Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. For a retired person, which of the following investments would provide the greatest protection against inflation? For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. Once a variable annuity has been annuitized: D) I and III. Variable annuity Which of the following is characteristic of fixed annuities? II) It has an internal capital market wherein each division competes for funds. During the accumulation phase, you make purchase payments. A) I and II The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. Based on the clients profile which of the following would be the best recommendation? The second phase is triggered when the annuity owner asks the insurer to start the flow of income, often referred to as the payout phase. We also reference original research from other reputable publishers where appropriate. The fees on variable annuities can be quite hefty. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ I. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. The following changes have been incorporated into Special Publication 800145, as of the date indicated - . B) The entire $10,000 is taxable as ordinary income. no. D) the yield is always higher than mortgage yields. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. 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. All of the following statements concerning a variable annuity are correct EXCEPT: D)Investment risk. C) IRAs. \hspace{10pt} Federal unemployment (employer only), 0.8%0.8\%0.8%. He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. Immediate life annuity. For an insurance company, mortality risk turns out unfavorably if: The features of variable deferred annuities are many. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. D)Variable annuity. A guaranteed lifetime annuity promises to pay the owner an income for the rest of their life. 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. b. D)I and III. Guaranteed Lifetime Annuity: How They Work, When They Pay You, This is also generally true of retirement plans. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. Question #29 of 48Question ID: 606831 Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? The accumulation period of a variable annuity may continue for many years. D) II and IV. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. Question #25 of 48Question ID: 606819 This guideline has been prepared for use by Federal agencies. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Question #26 of 48Question ID: 606811 C) 3000. When the second party dies, all payments cease. Home; About. Her agent recommended she choose a variable annuity as a safe haven for the funds. Universal variable life policies Uses in Investing, Pros, and Cons, Indexed Annuity: Definition, How It Works, Yields, and Caps. When money is deposited into the annuity, it is purchasing accumulation units. D) Life annuity with 10-year period certain. An annuitant assumes the investment risk of a variable annuity and is not protected byt he insurance company from capital losses. An annuity is an agreement for one person or organization to pay another a series of payments. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. a) What percentage of Facebook's users are from the United States? Reference: 12.1.1 in the License Exam. Securely download your document with other editable templates, any time, with PDFfiller. Do homework Doing homework can help you learn and understand the material covered in class. D) I and III B) Life annuity. Deferred Annuity Definition, Types, How They Work, What Is a Fixed Annuity? A)the state banking commission. The number of accumulation units can rise during the accumulation period. During the accumulation phase, the number of accumulation units will increase as additional money is invested. C)It will be higher. Variable annuities operate in similar ways to . 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. A)II and III It is innate and universal. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. What is the taxable consequence of this withdrawal to your client? Reference: 12.2.1 in the License Exam. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. D)partially a tax-free return of capital and partially taxable. The annuity unit's value represents a guaranteed return. Variable annuities are designed to combat inflation risk. *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. Question #13 of 48Question ID: 606822 B) The policyowner. Registration with FINRA is de facto registration with the SEC; no registration is required by the state banking commission. A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units.

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