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

Reference: 12.3.3 in the License Exam. C) Life annuity with period certain. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. C) Age 40, currently unemployed A security is any investment for profit with management performed by a third party. C) II and III. Variable annuities involve underlying equity investments in a separate account. B)I and III. A prospectus for a variable annuity contract: That can adversely affect your returns over the long term, compared with other types of investments. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. 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 guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. With a fixed annuity, by contrast, the insurance company assumes the risk of delivering whatever return it has promised. B) prime rate. Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. All of the following are characteristics of a variable annuity, except: a. Though there is no beneficiary designation during the annuitization, this is not an issue for this annuitant. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Francisco R. - Financial Professional - Prudential Financial | LinkedIn D)I and II. A) I and II A) Joint tenants annuity. A)an accounting measure used to determine the contract owner's interest in the separate account. A) number of annuity units. D) the payout plans provide the client income for life. *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. C) II and III. The fixed payment that the annuitant receives loses purchasing power over time as a result of inflation. Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. Her agent recommended she choose a variable annuity as a safe haven for the funds. However, because the client is not yet age 59- when making the withdrawal, he also pays a 10% penalty, or $1,000. The growth portion is taxed as ordinary income. C)number of accumulation units. The customer, in the accumulation stage of the annuity, is holding accumulation units. Once a customer annuitizes a variable annuity, which of the following statements are TRUE? a. a variable annuity guarantees an earnings rate of return. The annuity unit's value represents a guaranteed return. Carefully look at your options when choosing an annuity. Do homework Doing homework can help you learn and understand the material covered in class. How does an indexed annuity differ from a fixed annuity? B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually B)mutual fund units. Periodic payments are not a consideration because normally the payments into an annuity are level or in a lump sum. If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. B)Tax-free municipal bonds B) IPO. Each of the remaining statements are true. Annuities due are a type of annuity where payments are made at the beginning of each payment period. 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: Annuity units are units of ownership when the contract is in the payout stage. Suppose that 20%20 \%20% of their users are United States users who log on daily. Variable annuity salespeople must register with all of the following EXCEPT: What are the characteristics of annuity? - Wise-Answers Reference: 12.3.3 in the License Exam. B)Fixed annuity contract with a discussion regarding timing risk A)defined contribution plans. However, a discussion should occur regarding the risks that are associated with a fixed annuity; purchasing power risk. *Once a variable annuity is annuitized, the accumulation units are converted into a fixed number of annuity units. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. This guideline has been prepared for use by Federal agencies. Upon John's death during the accumulation period, Sue takes a lump-sum payment. Each of the remaining statements are true. A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. The funds in an annuity are off-limits to creditors and other debt collectors. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. The growth portion is taxed as a capital gain. Question #24 of 48Question ID: 606806 If this client is in the payout phase, how would his April payment compare to his March payment? C) 100% tax free. The accumulation period of a variable annuity may continue for many years. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. C) A 25year old public school teacher who would like to save enough for the purchase of her first home within the next 3 to 5 years. We also reference original research from other reputable publishers where appropriate. have investment risk that is assumed by the investor \hspace{10pt} Medicare, 1.5%1.5\%1.5% 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. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. a variable annuity has which of the following characteristics c) Construct a contingency table showing all the joint and marginal probabilities. 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. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. D) cost of living. C)earnings only and taxable Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. PDF The NIST definition of cloud computing A)II and IV. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Once annuitized, the number of annuity units does not vary. Underlying equity investments T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. must precede every sales presentation. What Are the Distribution Options for an Inherited Annuity? Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. 7 - Annuities Flashcards | Quizlet *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. A) I and II. Unit 12: Variable Annuities Flashcards | Chegg.com B) payment guarantee. The investor has already paid tax on the contributions but the earnings have grown tax-deferred. When may a variable annuity account be surrendered? A registered representative recommends a variable annuity with an income rider to a client. II) It has an internal capital market wherein each division competes for funds. A) Fixed annuities. This customer has no spouse or dependents, which negates the value of the death benefit. The time period depends on how often the income is to be paid. B)Life annuity with period certain. A) Any tax due is deferred. C) II and IV. A guaranteed lifetime annuity promises to pay the owner an income for the rest of their life. All of the following are characteristics of variable annuity contracts II. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. This factor is used to establish the dollar amount of the first annuity payment. Reference: 12.3.3 in the License Exam. A) periodic payment immediate annuity. 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. are purchased primarily for their insurance features For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. C) III and IV. For example, when paying rent, the rent payment (PMT) . A) waiver of premium C) Mutual fund portfolio consisting of blue chip stocks C)Variable annuity contract with a discussion regarding interest rate risk *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. *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. Reference: 12.1.2.1.1 in the License Exam. A) The policy provides a minimum guaranteed death benefit. Question #37 of 48Question ID: 606817 Variable annuities should be considered long-term investments due to the limitations on withdrawals. A) a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero \hspace{10pt} Social security, 6%6\%6% on first $100,000\$100,000$100,000 of employee annual earnings the state insurance commission. A) It will be higher. If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? A) The fact that the annuity payment may increase or decrease. Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: C) I and IV. Home; About. B) The entire $10,000 is taxable as ordinary income. A) I and III. Immediate life annuity with 10-year period certain. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. Securely download your document with other editable templates, any time, with PDFfiller. When the first party dies, the annuity payment is made to the survivor. How Good of a Deal Is an Indexed Annuity? An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: a variable annuity has which of the following characteristics C) payments continue for a pre-determined period of time. All of the following are characteristics of a variable annuity, except For an investor, which of the following is the most important factor in determining the suitability of a variable annuity investment? Question #45 of 48Question ID: 606795 Which of the following statements is not true about the characteristics of a trend? D) I and II. C) number of accumulation units. What is the annual cash flow generated from the new machine? B)I and III. D)Dow Jones Industrial Average. This recommendation is: D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. C) suitable regardless of funding sources C)none of these. 6102..55.001) is being updated on an ongoing basis. Once annuitized, the number of annuity units does not vary. The most popular type of variable annuity is a deferred annuity. Travel Times Journal found that the average per person cost of a 10-day trip along the Pacific coast, per person, is $1,015. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. A) Only during the payout period. PGIM Fixed Income has over $900 billion in assets under management across a broad array of fixed . A) partially a tax-free return of capital and partially taxable. Once a variable annuity has been annuitized: B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract A joint life with last survivor annuity: Expert Answer. D)value of accumulation units. A) Ordinary income tax on earnings exceeding basis. b) What probability is the 20%20 \%20% mentioned above? C)the yield is always higher than bond yields. Life Insurance vs. Annuity: What's the Difference? A)not suitable B)variable annuities are classified as insurance products. A) a minimum rate of return is guaranteed. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. Qualified Longevity Annuity Contract (QLAC): Definition, Taxes, and Example, Present Value of an Annuity: Meaning, Formula, and Example, Future Value of an Annuity: What Is It, Formula, and Calculation, Calculating Present and Future Value of Annuities, Present Value Interest Factor of Annuity (PVIFA) Formula, Tables. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. D) a lifetime withdrawal benefit (LWB) or lifetime income benefit is generally in the form of a rider attached to the contract which will come at a cost to the annuitant. B)reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. A) partially a tax-free return of capital and partially taxable. GuranteedExamLife Flashcards by Gabriel Martinez | Brainscape Licensed to sell Variable Annuities in the following state(s): FL, TX . IV. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. 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. C)I and IV. Question #27 of 48Question ID: 606818 Chapter 4: Annuities Flashcards | Chegg.com B) Life annuity. Question #25 of 48Question ID: 606819 *A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. B)corporate stock. C)II and IV. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? It was a lump-sum purchase. C) 3800. B) value of annuity units. Paraplanner / Marketing Support Specialist Job in Austin, TX Reference: 12.3.3 in the License Exam. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. What will this transaction provide? D) minimum guaranteed death benefit. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. Because this is not guaranteed, the policyowner bears the investment risk. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. must be filed with FINRA. C)insurance companies keep variable annuity funds in separate accounts from other insurance products. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: In the case of deferred annuities, this is often referred to as the accumulation phase. A)I and IV. Question #32 of 48Question ID: 606815 The downside was that the buyer was exposed to market risk, which could result in losses. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. The creation of an estate. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. The separate account is used for both variable life insurance and variable annuity investments. A)II and IV. Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. A) I and III. A) II and III. A) 4000. A trend makes considerable influence or impact. Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 Typically, they allow one withdrawal each year during the accumulation phase. An example would be if a life annuity with 10-year period certain contract holder died after 5 years, payments would continue for 5 more years to the beneficiary and then stop. A)II and III An investor who has purchased a nonqualified variable annuity has the right to: a variable annuity does not guarantee payments for life. Policyholders . A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. A)2800. D) II and IV. For an insurance company, mortality risk turns out unfavorably if: *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. In addition, if the customer is not at least 59-, there will be a tax penalty of an additional 10%. 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: C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. 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. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. 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. As with all tax-deferred accounts, municipal bonds are not appropriate investments because interest earned on municipals is already tax exempt at the federal level. The number of annuity units rises once annuitization begins. B) II and III B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract A)each annuity unit's value and the number of annuity units vary with time. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. 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. D)suitable due to the relative safety of the investment. This includes transportation, food, lodging, and entertainment. During payout, distributions will fluctuate due to performance in the separate account. 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. Science Health Science Nursing. Variable Annuities | Investor.gov Vaccine has decreased the incidence. Herpes Zoster has all of the following characteristics except: Group of answer choices. A)number of annuity units. B) II and IV. Question #15 of 48Question ID: 606804 B)Universal variable life policy. 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. During the accumulation phase, the number of accumulation units will increase as additional money is invested. C) II and III. Uses in Investing, Pros, and Cons, Indexed Annuity: Definition, How It Works, Yields, and Caps. an annuitant lives longer than expected. C) value of underlying securities held in the separate account. 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. Which of the following statements regarding variable annuities are TRUE? *An immediate annuity has no accumulation period. How to Rollover a Variable Annuity Into an IRA. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. Reference: 12.3.1 in the License Exam, Question #30 of 48Question ID: 606833 Periodic payment deferred annuity. Question #43 of 48Question ID: 606809 The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? Who assumes the investment risk in a variable annuity contract? Fixed annuities. Annuities | FINRA.org C) 3000. An annuity is an agreement for one person or organization to pay another a series of payments. A) I and IV. C) value of underlying securities held in the separate account. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. A) Life-only annuity B) I and IV. 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. approve changes in the plan portfolio. It may be used by nongovernmental . Question #20 of 48Question ID: 606808 B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. Instructions\textsf{\textcolor{#4257b2}{Instructions}}Instructions A variable annuity is just a tax-deferred annuity in which you get to choose how the value of the annuity is invested. B)fixed in value until the holder retires. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. An annuity is an insurance product that promises to pay out income at a future date based on invested funds. C) II and IV. This role is also eligible for annual short-term incentive compensation. A)It will stay the same. 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: C)II and IV. This cloud model is composed of five essential characteristics, three service models, and four deployment models. b. 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. The accumulation unit's value is used to calculate the total value of the account. D) I and IV. When the annuitization option is selected, each payment represents both capital and earnings.

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