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. Reference: 12.1.2.1.1 in the License Exam. These include white papers, government data, original reporting, and interviews with industry experts. C)earnings only and taxable Your customer in his early 30s has received a modest inheritance from a relative. What is the taxable consequence of this withdrawal to your client? What Are the Risks of Annuities in a Recession? II) It has an internal capital market wherein each division competes for funds. 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. D) each annuity unit's value varies with time, but the number of annuity units is fixed. A trend makes considerable influence or impact. The original investment has grown to a value of $60,000. Distributions from nonqualified variable annuities are: The growth portion is subject to a 10% penalty. If the customer takes a withdrawal of $10,000, what are the tax consequences? B) the rate of return is determined by the underlying portfolio's value. C)Mortality risk. Try The wage for applicants for this position is $45,979.00 per year. C) II and IV. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. III. When the first party dies, the annuity payment is made to the survivor. $63,000 b.$51,000 c. $18,000 d.$6,000. In addition, an element of risk must be present. A client has purchased a nonqualified variable annuity from a commercial insurance company. Question #41 of 48Question ID: 606801 A)II and III. A) 2800. *A variable annuity may only be surrendered during the accumulation period. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. *During the accumulation phase, the number of accumulation units will increase as additional money is invested. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? Distributions to the annuitant will fluctuate during the payout period. Annuities are similar to other forms of investing in that the owner invests money with the hope that it will gain in value, but annuities also come with higher fees than most mutual funds. A) I and III. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. D) the payout plans provide the client income for life. Question #31 of 48Question ID: 606836 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. However, a discussion should occur regarding the risks that are associated with a fixed annuity; purchasing power risk. A) periodic payment immediate annuity. D)the rate of return is determined by the underlying portfolio's value. Of the four client profiles below which might be the best suited for a variable annuity recommendation? A) There is no risk in a variable annuity. Question #32 of 48Question ID: 606815 Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. a variable annuity does not guarantee payments for life. A) Ordinary income tax on earnings exceeding basis. When the annuitization option is selected, each payment represents both capital and earnings. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. It was a lump-sum purchase. Carefully look at your options when choosing an annuity. Fixed interest rates during the payout period The value of each accumulation unit varies: Daily Variable annuities have Variable interest rates and benefits All of the following statements are true regarding the interest rate guarantees of fixed annuities, EXCEPT: B)Universal variable life policy. C)Money market fund. C) During the annuity period. C)municipal bonds. B)I and III. B) variable annuities. \hspace{7pt} a. December 303030, to record the payroll. Reference: 12.1.2.1.1. in the License Exam. A) be paid to a designated beneficiary. Question #43 of 48Question ID: 606809 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. Which of the following is NOT an accurate statement concerning a variable life insurance contract? 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)Life annuity with period certain. If this client is in the payout phase, how would his April payment compare to his March payment? C) a variable annuity contract does not guarantee any type of return Options. How is the distribution taxed? Variable annuities operate in similar ways to . When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. the SEC. 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. the state insurance commission. A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. B)corporate stock. The separate account is NOT likely to invest in: Which of the following is not a characteristic of a program module? A client has purchased a nonqualified variable annuity from a commercial insurance company. C) annuity units. The tax on this is $2,800 ($10,000 x 28%). B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. B) fixed payments for 10 years, followed by variable payments for life. The offers that appear in this table are from partnerships from which Investopedia receives compensation. B) IPO. 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. D)an accounting measure used to determine payments to the owner of the variable annuity. C)II and III. Science Health Science Nursing. Question #12 of 48Question ID: 606814 C) be returned to the separate account. order now. I. B)value of annuity units. C) The investor's concerns about taxes. *Only variable annuities have payout plans that provide the client income for life. A registered person recommends the purchase of a variable annuity to one of his clients. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 A) two people are covered and payments continue until the second death. Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. C) Tax-free municipal bonds In a variable life annuity with 10-year period certain, a contract holder receives: D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. *Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. 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. A) Any tax due is deferred. B) payments continue until the death of the primary owner. C) taxed as ordinary income only to the extent of earnings. Variable annuity Which of the following is characteristic of fixed annuities? C) II and IV. Which of the following statements is not true about the characteristics of a trend? 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. What will this transaction provide? *Of the four customer profiles the individual already making the maximum retirement account contributions available to him and wanting to minimize the tax consequences of being in a high income tax bracket would be most suitable for a VA recommendation. C) The portion of the premium invested in the insurance company's general account is used to provide for the minimum guaranteed amount of the death benefit. *The customer, in the accumulation stage of the annuity, is holding accumulation units. 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 variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic pay- ments to you, beginning either immediately or at some future date. C)Growth mutual funds C) insurance companies keep variable annuity funds in separate accounts from other insurance products. About Us This includes transportation, food, lodging, and entertainment. A variable annuity is a combination of 2 products: an insurance contract and a mutual fund. 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. C) the client assumes the investment risk. The growth portion is taxed as a capital gain. A) II and III. Reference: 12.3.3 in the License Exam. 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. C)none of these. C) Life annuity with period certain. Most annuities will not allow you to withdraw additional funds from the account once the payout phase has begun. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. All of the following statements about variable annuities are true EXCEPT: Every annuity has some characteristics in common. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. the agent must be licensed in both insurance and securities. II.