C) III and IV. What percentile is represented by $710? *The accumulation period of a variable annuity may continue for many years. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. Classifying annuities There are many categories of annuities. He makes the following four statements, all of which are true EXCEPT Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: Once the contract is annuitized, monthly payments to the customer are: externalities. Based on the clients profile which of the following would be the best recommendation? The number of accumulation units is always fixed throughout the accumulation period. b) What probability is the 20%20 \%20% mentioned above? B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually B) payment guarantee. However, because the client is not yet age 59- when making the withdrawal, he also pays a 10% penalty, or $1,000. C) I and IV.
Simple and general annuities problems with solutions D) not suitable because a lifetime income rider is only for someone who is already retired. C) It will stay the same. 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. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. 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. The number of accumulation units is always fixed throughout the accumulation period. D)accumulation units. Reference: 12.3.3 in the License Exam. are purchased primarily for their insurance features *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. These contracts come with high surrender charges. A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as Her agent recommended she choose a variable annuity as a safe haven for the funds. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. The value of accumulation and annuity units varies with the investment performance of the separate account. An accumulation unit in a variable annuity contract is: 's dividend yield was % last year. B)a minimum rate of return is guaranteed. What is the taxable consequence of this withdrawal to your client? A 1 The applicant and possibly the agent initial any changes made. PGIM Fixed Income, a division of PGIM Inc., an SEC-registered investment adviser and a business unit of Prudential Financial, Inc. is seeking a Portfolio Risk Surveillance Analyst. *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. *Variable annuity contracts were devised to help investors keep pace with inflation. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. The tax on this is $2,800 ($10,000 x 28%). D)with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed, With guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is not guaranteed because payments stop when the annuitant has received an amount equal to the principal account value or the contract term ends. Reference: 12.3.2.1 in the License Exam. c) Construct a contingency table showing all the joint and marginal probabilities. C)I and III. Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. D) Joint and last survivor annuity. A separate account will invest in a number of different securities. B) IPO. A) Joint tenants annuity. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. Early withdrawal is either removal of funds from a fixed-term investment before the maturity date, or the removal of funds from a tax-deferred investment account or retirement savings account before a prescribed time. You can buy an annuity with either a lump sum or a series of payments, and the accounts value will grow accordingly. What is her total tax liability? Indexed annuity owners receive credited interest tied to the fluctuations of the linked index An immediate annuity consists of a single premium An immediate annuity has a single premium. This describes which of the following annuities? With a fixed annuity, by contrast, the insurance company assumes the risk of delivering whatever return it has promised. The tax on this is $2,800 ($10,000 x 28%). How to Rollover a Variable Annuity Into an IRA. *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. B) the state insurance department. The following changes have been incorporated into Special Publication 800145, as of the date indicated - . A. PGIM Fixed Income has over $900 billion in assets under management across a broad array of fixed . Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. How is the distribution taxed? Her intent was to use the funds for the down payment on a house after graduation. \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ An annuity may be purchased under all of the following methods EXCEPT: A 60-year-old individual, nearing retirement who has both IRAs and a 401k in place, is comfortable with market risk associated with the stock market, and has a lump sum in cash available to fund the annuity D)I and III. Cashing out life insurance policies or VAs where steep surrender charges are likely to exist, particularly in the earlier years of those contracts, is also considered abusive. Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. Only variable annuities have payout plans that provide the client income for life. Which of the following recommendations would best meet the customer profile? D) II and IV. A)IPO. covers more than one person. B) II and III.
# 7 Annuities Flashcards | Quizlet Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. III) A hierarchy of corporate staff evaluates divisions' plans and performance. Here is how guaranteed lifetime annuities work. Periodic payment deferred annuity. The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. Most annuities will not allow you to withdraw additional funds from the account once the payout phase has begun. A)equity funds. 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. 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. D) II and IV. The investor purchased accumulation units. What is the taxable consequence of this withdrawal to your client? D) Age 27, saving for first home.
What are the different types of annuities? | III D)I and IV. Payments from a variable annuity depend on the securities' value in the separate account's underlying investment portfolio. If you die before the payout phase, your beneficiaries may receive a. B)4200. That can adversely affect your returns over the long term, compared with other types of investments. While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. Question #14 of 48Question ID: 606823 II. B) variable annuities. Reference: 12.1.1 in the License Exam. The funds are not liquid due to the surrender fees, and there is also a 10% penalty on withdrawals before age 59-. At the end of the year, your account has a value of $10,750 ($5,500 in the stock fund and $5,250 in the bond fund), minus fees and charges. However, the web version (cat. Reference: 12.3.4 in the License Exam. D) I and II. 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. When money is deposited into the annuity, it is purchasing accumulation units. These contracts cover both lives and will continue to make payments until the last spouse dies. D)I and III. 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? An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. *A periodic payment immediate annuity is a contradiction in terms. Lifetime vs. fixed period annuities Reference: 12.3.3 in the License Exam. B) The entire $10,000 is taxable as ordinary income. D) II and III. A)the state banking commission. He originally invested $29,000 4 years ago; it now has a value of $39,000. C) During the annuity period. C) There is no tax as the withdrawal is considered return of capital. Annuities are complicated products, so that may be easier said than done. B) Life annuity with period certain When the annuitization option is selected, each payment represents both capital and earnings. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. A) waiver of premium Which of the following recommendations would best meet the customer profile? B) prime rate. Which of the following statements is not true about the characteristics of a trend? Your customer in his early 30s has received a modest inheritance from a relative. The following information about the payroll for the week ended December 303030 was obtained from the records of Vienna Co.: Salaries:Deductions:Salessalaries$670,000Incometaxwithheld$198,744Warehousesalaries110,000Socialsecuritytaxwithheld51,714Officesalaries234,000Medicaretaxwithheld15,210$1,014,000U.S. Salaries:SalessalariesWarehousesalariesOfficesalaries$670,000110,000234,000$1,014,000Deductions:IncometaxwithheldSocialsecuritytaxwithheldMedicaretaxwithheldU.S. Immediate annuities purchase annuity units directly. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. *Contributions to a nonqualified annuity are made with the owner's after-tax dollars. B) I and IV. C)the yield is always higher than bond yields. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. 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. C)III and IV There are two interest rates under fixed annuities. A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. A) II and III. Guaranteed Lifetime Annuity: How They Work, When They Pay You, This is also generally true of retirement plans. C)Money market fund. What will this transaction provide? Each of the remaining statements are true. This annuity is nonqualified, which means the client has paid for it with after-tax dollars and has a basis equal to the original $29,000 investment. There is a guaranteed minimum interest rate, normally amounting to between 1 and 3 percent. D) Growth mutual funds.
Annuities | FINRA.org No, annuities are not FDIC-insured as they are not bank products. D)II and III. \text{Salaries:} && \text{Deductions:}\\ However, it does guarantee payments for life (mortality). B) fixed in value until the holder retires. Question #25 of 48Question ID: 606819 A registered representative explaining variable annuities to a customer would be CORRECT in stating that: A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. C)100% tax deferred. Which Earns More: Variable or Fixed Annuities? Your client owns a variable annuity contract with an AIR of 4%. 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. Fixed annuities. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. A registered representative's (RR) customer is speaking of a variable life insurance contract he owns. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. This makes a total of $4,000 tax and penalty paid on the random withdrawal. B)I and II 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 The value of an annuity unit varies from month to month according to the performance of the separate account in comparison to the assumed interest rate. An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. The figure below illustrates a six-month annuity with monthly payments. C)none of these. I. C)II and III. B) During the accumulation period. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. A)each annuity unit's value and the number of annuity units vary with time.
Herpes Zoster has all of the following characteristics except: no. Vaccine has decreased the incidence. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income.
Which of the following is NOT associated with characteristics of shares If your 60-year-old customer purchases a nonqualified variable annuity and withdraws some of her funds before the contract is annuitized, what are the consequences of this action? There are also immediate annuities, which begin paying income right away. D)the safety of the principal invested. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? A variable annuity is a long term investment issued by an insurance company that can help you grow your money, take income in retirement and pass on your wealth. 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. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. D)variable annuities offer the investor protection against capital loss. This recommendation is: C) 10% penalty plus payment of ordinary income tax on all funds withdrawn exceeding basis. used for the investment of funds paid by contract holders. Policyholders . Determine the revenue equation given the profit and expense equations. A) Fixed Annuity Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. C) II and IV. B) I and III. Changes in payments on a variable annuity correspond most closely to fluctuations in the: A) not suitable B)corporate stock. Therefore, ordinary income taxes will apply to the entire $10,000. Typically, they allow one withdrawal each year during the accumulation phase. The amount of the purchase payments that go into the account may be less than you paid because fees were taken out of the purchase payments. 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. Reference: 12.3.3 in the License Exam.