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

C)Corporate bonds. Practice all cards. A)It will stay the same. C) The insurance company. It is the starting point of motivation because they generate emotions. For a retired person, which of the following investments would provide the greatest protection against inflation? View full document. A)accumulation shares. D) a minimum of 10 years of variable payments, followed by additional variable payments for life D)II and III. 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. Therefore only a fixed annuity could be considered as suitable. D)partially a tax-free return of capital and partially taxable. A)I and IV. Which of the following recommendations would best meet the customer profile? There is a guaranteed minimum interest rate, normally amounting to between 1 and 3 percent. Try B) The policyowner. The number of annuity units rises once annuitization begins. A) variable annuities offer the investor protection against capital loss. *Contributions to a nonqualified variable annuity are not tax deductible. 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 C) Tax-free municipal bonds (The exception is the fixed income annuity, which has a moderate to high payout that rises as the annuitant ages). When the second party dies, all payments cease. 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. B)I and II A) 4000. No, annuities are not FDIC-insured as they are not bank products. Underlying equity investments T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). C) Unit refund life option C) each annuity unit's value and the number of annuity units vary with time. A client has purchased a nonqualified variable annuity from a commercial insurance company. *An immediate annuity has no accumulation period. 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) number of annuity units. Question #16 of 48Question ID: 606807 B) Municipal bonds. used for the investment of funds paid by contract holders. How is the distribution taxed? A)Purchasing power risk. "Variable Annuities: What You Should Know," Pages 67. Question #13 of 48Question ID: 606822 The distribution of questions by topic is not intended to represent the 39) A variable annuity has the following guarantees: [PDF] Understanding your variable annuity UBS Variable annuities are long-term investment vehicles that with these securities as well insurance company and do not apply to the investment C) suitable regardless of funding sources B) It will be lower. D) cost of living. All of the following are true about annuities EXCEPT: they have all the same characteristics as life insurance. must be filed with FINRA. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. Sub accounts and mutual funds are conceptually identical, but sub accounts don't have ticker symbols that investors can easily type into a fund tracker for research purposes. Investopedia does not include all offers available in the marketplace. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. A) I and II Over the past five years, 's dividend yield has averaged % per year. *The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. C) II and III. The accumulation unit's value is used to calculate the total value of the account. The features of variable deferred annuities are many. I. He makes the following four statements, all of which are true EXCEPT Reference: 12.1.2 in the License Exam. Question #11 of 48Question ID: 606816 Reference: 12.2.1 in the License Exam. 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. C) 10 years of variable payments. A variable annuity's separate account is: II. *A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. The value of the separate account is now $30,000. Based only on these facts, the variable annuity recommendation is C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed III. D) a minimum of 10 years of variable payments, followed by additional variable payments for life. D) I and III. The value of these units varies with the performance of the separate account. A) be paid to a designated beneficiary. *A periodic payment immediate annuity is a contradiction in terms. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A) I and II. III) A hierarchy of corporate staff evaluates divisions' plans and performance. C)the number of annuity units is fixed, and their value remains fixed. Distributed along a dermatome. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. A) I and II Each of the remaining statements are true. D)I and III. A) Ordinary income tax on earnings exceeding basis. For an insurance company, mortality risk turns out unfavorably if: A variable annuity is a combination of 2 products: an insurance contract and a mutual fund. A)the number of annuity units becomes fixed when the contract is annuitized. B)I and IV. A) Ordinary income tax on earnings exceeding basis. continues payments as long as one annuitant is alive. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement Question #31 of 48Question ID: 606836 D) value of accumulation units. An annuity is a continuous stream of equal periodic payments from one party to another for a specified period of time to fulfill a financial obligation. a variable annuity guarantees payments for life. During the accumulation phase, you make purchase payments. C) II and IV. who needs access to the sum invested at later time. 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. A)II and IV. B)II and III. A 10% penalty applies only if distributions begin before age 59-. A) two people are covered and payments continue until the second death. Variable annuity salespeople must be registered with FINRA and the state insurance department. && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ A) mortality guarantee. Licensed to sell Variable Annuities in the following state(s): FL, TX . *When a variable contract is annuitized (distributed in regular payments, not as a lump sum), the number of accumulation units is multiplied by the unit value to arrive at the account's current value. What Are the Risks of Annuities in a Recession? A) The fact that the annuity payment may increase or decrease. C) II and IV. None of the other investments listed here offer tax-deferred growth. A) periodic payment immediate annuity. C) The ordinary income on the proceeds over the cost basis plus 10% of the net gain (if any) if Sue is younger than 59- years old. John is the annuitant in a variable plan, and Sue is the beneficiary. B)a majority vote from the shareholders is required to change the investment objectives. D) II and III. Though there is no beneficiary designation during the annuitization, this is not an issue for this annuitant. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. Question #41 of 48Question ID: 606801 D)each annuity unit's value is fixed, but the number of annuity units varies with time. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. D) periodic payment deferred annuity. When the first party dies, the annuity payment is made to the survivor. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. A) be paid to a designated beneficiary. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. Which 2 of the 4 client profiles would a VA be LEAST suitable for? A separate account will invest in a number of different securities. e) Are From the United States and Log on every day independently? This role is also eligible for annual short-term incentive compensation. D) each annuity unit's value varies with time, but the number of annuity units is fixed. A variable annuity is both an insurance and a securities product. A)II and IV. Sample problems from Chapter 9. . In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. A) partially a tax-free return of capital and partially taxable. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. Annuities are complicated products, so that may be easier said than done. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. Do homework Doing homework can help you learn and understand the material covered in class. D) Joint and last survivor annuity. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. *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. 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 annuities may only be sold by registered representatives. D) II and IV. D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. The number of annuity units varies. 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. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract (Check all that apply.) Once the contract is annuitized, monthly payments to the customer are: 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. Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. Reference: 12.1.2.1.1. in the License Exam. B) fixed payments for 10 years, followed by variable payments for life. B)Capital gains taxation on the earnings withdrawn in excess of the owner's basis. 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. Can I Borrow from My Annuity for a House Down Payment? 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. Funding a VA contract by cashing out either life insurance policies or existing VA contracts, especially those held for a short period of time is not suitable. a) What percentage of Facebook's users are from the United States? Designed to protect against inflation. C) a variable annuity contract does not guarantee any type of return D) I and IV. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? B)a minimum rate of return is guaranteed. B)I and III. C)II and III. C)earnings only and taxable 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 A)II and IV. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Once a variable annuity has been annuitized: Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. A)There is no tax as the withdrawal is considered return of capital. 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. Reference: 12.3.4 in the License Exam, Chapter 16: U.S. Government and State Rules a, Chapter 17: Other SEC and SRO Rules and Regul, Chapter 15: Ethics, Recommendations, and Taxa, Chapter 13: Direct Participation Programs, Fundamentals of Financial Management, Concise Edition, Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik, Carl Warren, James M Reeve, Jonathan E. Duchac. Once annuitized, the number of annuity units does not vary. A registered representative recommends a variable annuity with an income rider to a client. Reference: 12.3.3 in the License Exam. 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. 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. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). 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)II and IV. Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. The most popular type of variable annuity is a deferred annuity. C) III and IV *During the accumulation phase, the number of accumulation units will increase as additional money is invested. \end{array} A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. A) Fixed Annuity Question #46 of 48Question ID: 606796 Though its stated return might not be as high as the other choices potential returns, only a fixed annuity fits the objective and risk averse traits of this client. D) the payout plans provide the client income for life. have investment risk that is assumed by the investor Reference: 12.1.2.1.1 in the License Exam. must precede every sales presentation. *A variable annuity may only be surrendered during the accumulation period. B) be paid to any legal heirs as recognized by the annuitant's state of domicile. *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. B) I and IV. The customer, in the accumulation stage of the annuity, is holding accumulation units. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. Question #37 of 48Question ID: 606817 C)complete all paper work to purchase the annuity contract and obtain the clients signature immediately.