a variable annuity has which of the following characteristics

All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: While a variable annuity has the benefit of tax-deferred growth, its annual expenses are likely to be much higher than the expenses of a typical mutual fund. A)value of underlying securities held in the separate account. C) The insurance company. Frequently Asked Questions Anti-Money Laundering Program and Suspicious However, because the client is not yet age 59- when making the withdrawal, he also pays a 10% penalty, or $1,000. 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. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed B) the state insurance department. An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. Lifetime vs. fixed period annuities C)the SEC. D) be paid to the issuing company to complete the plan. A)exempt from taxes The annuitant may not contribute and withdraw simultaneously. John is the annuitant in a variable plan, and Sue is the beneficiary. C)I and IV. C)Variable annuity contract with a discussion regarding interest rate risk Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. Because this is not guaranteed, the policyowner bears the investment risk. A) The entire amount is taxed as ordinary income, because it is not life insurance. A Variable Annuity has which of the following characteristics? B) During the accumulation period. required to be located off of the company's premises. A prospectus for a variable annuity contract: D) The fact that periodic payments into the contract may increase or decrease. Here is how guaranteed lifetime annuities work. A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as B)unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. Immediate annuities purchase annuity units directly. A)II and III. B)Universal variable life policy. The value of the separate account is now $30,000. 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. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. D) the payout plans provide the client income for life. \end{array} B) IPO. Variable annuity salespeople must register with all of the following EXCEPT: **Because common stocks are not fixed dollar investments, they have the opportunity to keep pace with inflation. D)variable annuities. C) 10 years of variable payments. The growth portion is subject to a 10% penalty. *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. A)Fixed annuities. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. *The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. A) A variable annuity D) Life annuity with 10-year period certain. A client has purchased a nonqualified variable annuity from a commercial insurance company. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. The growth portion is subject to a 10% penalty. An accumulation unit in a variable annuity contract is: Question #38 of 48Question ID: 606798 The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. On any device & OS. 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 #19 of 48Question ID: 606826 In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. A)not suitable D) the number of annuity units becomes fixed when the contract is annuitized. There are two interest rates under fixed annuities. 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. C) a variable annuity contract does not guarantee any type of return The correct answer was: partially a tax-free return of capital and partially taxable. CDs insured by the FDIC. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. Question #32 of 48Question ID: 606815 It is the starting point of motivation because they generate emotions. 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 Prudential's businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, asset management, and real estate services. Question #24 of 48Question ID: 606806 a variable annuity does not guarantee payments for life. A)II and IV. The separate account performance compared to last month's performance. B)FINRA. Are There Penalties for Withdrawing Money From Annuities? Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. Of the four client profiles below which might be the best suited for a variable annuity recommendation? A Variable Annuity Has Which of the Following Characteristics d) What is the probability that a user is from the United States, given that he or she logs on every day? A) A variable annuity B)Value of each annuity unit each month. The Three Main Types of Annuity Insurance - Fixed, Variable, and Equity It was a lump-sum purchase. II. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. 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. D) Variable annuity. D)0. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. A)2800. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Science Health Science Nursing. C) Unit refund life option A) be paid to a designated beneficiary. D) A 50 year old individual with $50,000 cash to invest who has already made the maximum contributions to an IRA and the 401(k) plan at his place of employment and would like to minimize some of the tax consequences of his currently high tax bracket. Changes in payments on a variable annuity correspond most closely to fluctuations in the: In this case, the investor is taking a lump-sum distribution before reaching age 59- and must pay an additional 10% penalty on the taxable amount. If the customer takes a withdrawal of $10,000, what are the tax consequences? 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. *A variable annuity is a security and must be registered with the SEC, not FINRA. A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. B)suitable regardless of funding sources A registered representative explaining variable annuities to a customer would be CORRECT in stating that: Question #36 of 48Question ID: 606805 C) III and IV. B) 100% taxable. D) I and II. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. Question #47 of 48Question ID: 606813 *When money is deposited into the annuity, it is purchasing accumulation units. B)Variable annuities. \hspace{10pt} Medicare, 1.5%1.5\%1.5% How does an indexed annuity differ from a fixed annuity? Therefore only a fixed annuity could be considered as suitable. PDF Prudential IncomeFlex Target Vanguard Balanced Index Fund B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. 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: A) II and III. A) Money market fund. A)the yield is always higher than mortgage yields. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. D)an accounting measure used to determine payments to the owner of the variable annuity. C) value of underlying securities held in the separate account. C)Money market fund. Once a customer annuitizes a variable annuity, which of the following statements are TRUE? Reference: 12.1.2 in the License Exam. continues payments as long as one annuitant is alive. All of the following are characteristics of variable annuity contracts Instructions\textsf{\textcolor{#4257b2}{Instructions}}Instructions Most annuities will not allow you to withdraw additional funds from the account once the payout phase has begun. A)III and IV. C)number of accumulation units. B) The policyowner. IV. If you need to withdraw money from the account because of a financial emergency, you may face surrender fees. A)I and IV. *During the accumulation phase, the number of accumulation units will increase as additional money is invested. have investment risk that is assumed by the investor The investor purchased accumulation units. C) each annuity unit's value and the number of annuity units vary with time. Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: What is her total tax liability? D)Any tax due is deferred. C)III and IV The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. Question #14 of 48Question ID: 606823 Variable annuities are riskier than fixed annuities because the underlying investments may lose value. Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. The growth portion is taxed as a capital gain. the state insurance commission. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. For example, when paying rent, the rent payment (PMT) . C) II and IV. D) I and IV. Reference: 12.1.2.1.1 in the License Exam. Nicks Enterprises has purchased a new machine tool that will allow the company to improve the efficiency of its operations. 6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Dec 2005 b. Facebook reports that 70%70 \%70% of their users are from outside the United States and that 50%50 \%50% of their users log on to Facebook daily. How is the distribution taxed? B) II and III D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. Determine the revenue equation given the profit and expense equations. Reference: 12.3.3 in the License Exam. C)The entire $10,000 is taxable as ordinary income. B)Capital gains taxation on the earnings withdrawn in excess of the owner's basis. D)Variable annuity. B) the safety of the principal invested. A) I and III. C) I and IV. What percentile is represented by $710? When may a variable annuity account be surrendered? 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. A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of sub accounts. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. D) II and IV. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually A) III and IV. C)II and IV. A) II and III. B)I and II D) payments continue until age 70-. D) Variable annuity. *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. During payout, distributions will fluctuate due to performance in the separate account. 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 . B) I and III. You can tailor the income stream to suit your needs. \hspace{10pt} \text{Office salaries} & \underline{234,000} & \hspace{10pt} \text{Medicare tax withheld} & 15,210\\ B) I and IV. The number of accumulation units is always fixed throughout the accumulation period. D) There is no guarantee regarding the investment results of the separate account. A) partially a tax-free return of capital and partially taxable. Reference: 12.3.2.1 in the License Exam. A) Joint tenants annuity. C)none of these. If a customer is about to buy a variable annuity contract and wants to select an annuity with a payout option providing the largest possible monthly payment, which of the following payout options would be most suitable? 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. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. B)reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. In a variable life annuity with 10-year period certain, a contract holder receives: B)Life annuity with period certain. Once the contract is annuitized, monthly payments to the customer are: What are the different types of annuities? | III A)100% tax free. guarantees payments for a certain period of time. Immediate life annuity with 10-year period certain. Once a variable annuity has been annuitized: Options. A) a variable annuity contract will provide a fluctuating monthly check upon the annuitization of the contract (Check all that apply.) All of the following are characteristics of Variable Annuity contracts EXCEPT The possibility of higher returns and greater income than fixed annuities, but there's also a risk that the account will fall in value A There are no surrender fees B Guaranteed death benefit C Tax deferred growth D Training Explanations She may choose to receive monthly payments for the rest of her life. D)an accounting measure used to determine payments to the owner of the variable annuity. That can adversely affect your returns over the long term, compared with other types of investments. do not have a separate account This chapter was updated on 15 December, 2005. Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. Income that cannot be outlived by the owner Needs - are goal-directed forces that people experience. Chapter 4: Annuities Flashcards | Chegg.com Question #28 of 48Question ID: 606821 continues payments only as long as all annuitants are still alive. View full document. A variable annuity has two phases: an accumulation phase and a payout (annuitization) phase. C) suitable regardless of funding sources The downside was that the buyer was exposed to market risk, which could result in losses. Question #16 of 48Question ID: 606807 All of the following characteristics are shared by both a mutual fund and a variable annuity's separate account EXCEPT: Question #45 of 48Question ID: 606795 Trends Networks and Critical Thinking Module 2 Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 Fixed Annuity, Retirement Annuities: Know the Pros and Cons. Policyholders . B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract The separate account is used for both variable life insurance and variable annuity investments. C)II and IV. A) 2800. *Accumulation units represent units of ownership in a life insurance company's separate account when the contract is in the accumulation stage. If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. *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. For example, when paying rent, the rent payment (PMT) variable annuity without paying tax at the time of the transfer. 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 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. 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. The payout compared to the initial payout upon annuitization. This compensation may impact how and where listings appear. Annuities due are a type of annuity where payments are made at the beginning of each payment period. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children A variable annuity is both an insurance and a securities product. A) not suitable 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. B) II and IV. A)unsuitable because the return on something as conservative as a variable annuity tends to be low. D) each annuity unit's value varies with time, but the number of annuity units is fixed. D)money market funds. A 3 can be sold by someone with only an insurance license D) Capital gains tax on earnings exceeding basis. Supplemental income stream for retirement, not preservation of capital should be the catalyst to consider a VA and for anyone who may need access to the sum invested for any reason a VA would not be considered a suitable recommendation. D) None, because it is the proceeds from a life insurance company. savingsbonds30,420Groupinsurance45,630$341,718\begin{array}{lrlr} A) There is no risk in a variable annuity. The accumulation unit's value is used to calculate the total value of the account. C) Life annuity with period certain.
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