Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. 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. Once a variable annuity has been annuitized: Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. Annuities | FINRA.org B) II and III A registered representative explaining variable annuities to a customer would be CORRECT in stating that: As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. Table1. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. As part of his profile he stresses that he has had uncomfortable experiences in the past with the stock market and is not inclined to invest in anything that is based on stock market performance and would opt for principal protection instead. Question #47 of 48Question ID: 606813 Your customer in his early 30s has received a modest inheritance from a relative. C)I and IV. A the safety of the principal invested B the yield is always higher than bond yields. She will receive the annuity's entire value in a lump-sum payment. D)the state insurance department. B) I and III. Premiums made into the annuity purchase accumulation units. a) What percentage of Facebook's users are from the United States? Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. Variable annuity salespeople must register with all of the following EXCEPT: A) FINRA. D)each annuity unit's value is fixed, but the number of annuity units varies with time. 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 . The number of accumulation units is always fixed throughout the accumulation period. *A variable annuity may only be surrendered during the accumulation period. C) Tax-free municipal bonds must provide full and fair disclosure. Reference: 12.2.1 in the License Exam. Your client has $50,000 to invest. B) Corporate debt securities C)the number of annuity units is fixed, and their value remains fixed. DR:BASSANT ADEL 9 QUIZ CH 6 Choose the correct answer: 1-Insurance policy benefits are classified on an insurance company's balance sheet as A. liabilities, because the insurance company may have to pay out the benefits B. assets, because policy benefits are valuable to the company C. liabilities, because customers may fall behind on their premium payments D. assets, because policy benefits . A) periodic payment immediate annuity. Vaccine has decreased the incidence. A)Joint tenants annuity. All of the following are characteristics of a variable annuity, except A) I and IV. Round to the nearest hundredth of a percent. When may a variable annuity account be surrendered? Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. There is no clear answer to this. A 1 The applicant and possibly the agent initial any changes made. How is the distribution taxed? B)reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. What will this transaction provide? 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) a variable annuity contract is subject to fluctuating values due to market fluctuations of the underlying separate accounts. 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 None of the other investments listed here offer tax-deferred growth. A registered representative recommends a variable annuity with an income rider to a client. It is innate and universal. Sas#8-psy 002 - Organizational Behavior Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: Variable annuities operate in similar ways to . No, annuities are not FDIC-insured as they are not bank products. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. A)It will stay the same. 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. C) II and IV. 's dividend yield was % last year. \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ Your client owns a variable annuity contract with an AIR of 4%. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. a variable annuity does not guarantee payments for life. We also reference original research from other reputable publishers where appropriate. A variable annuity's separate account is: A separate account will invest in a number of different securities. "Variable Annuities: What You Should Know," Pages 67. Because this is not guaranteed, the policyowner bears the investment risk. Variable Annuities | Investor.gov A) an accounting measure used to determine payments to the owner of the variable annuity. This factor is used to establish the dollar amount of the first annuity payment. Chapter 4: Annuities Flashcards | Chegg.com If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. This recommendation is: D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. 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. Of the 4 client profiles below, which might be the best suited for a variable annuity recommendation? Policyholders . 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. "Variable Annuities: What You Should Know," Page 3. When the annuitization option is selected, each payment represents both capital and earnings. D) Age 27, saving for first home. the SEC. Based only on these facts, the variable annuity recommendation is D) II and III. Variable annuity salespeople must register with all of the following EXCEPT: Which of the following are defined as securities? A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . A)100% tax free. B)100% taxable. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. A)the number of annuity units becomes fixed when the contract is annuitized. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. \hspace{10pt} State unemployment (employer only), 3.8%3.8\%3.8% MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. U.S. Securities and Exchange Commission. If an insurance holder dies sooner than expected, the insurance company will have to pay the death benefit sooner. CDs insured by the FDIC. Which of the following are defined as securities? An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. 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. If the annuitant should die during that time, any death benefit would be paid to a beneficiary designated by the annuitant at the time the annuity was purchased. B) 0. 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. A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. B)I and III. Herpes Zoster has all of the following characteristics except: Changes in payments on a variable annuity correspond most closely to fluctuations in the: Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 Deal with mathematic Math is all about solving equations and finding the right answer. They are also not considered suitable for anyone who anticipates needing a lump sum within a short time frame to fund other endeavors. 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. (primary needs). Her agent recommended she choose a variable annuity as a safe haven for the funds. It was a lump-sum purchase. C) Unit refund life option Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 II. "Variable Annuities: What You Should Know," Page 10. B) life income Every annuity has some characteristics in common. D)suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract, Based on the information given in the question, the VA recommendation would not be suitable. D)II and III. D) I and III. C) each annuity unit's value and the number of annuity units vary with time. *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. A) partially a tax-free return of capital and partially taxable. A)II and IV. Your client owns a variable annuity contract with an AIR of 4%. Reference: 12.3.2.4 in the License Exam. III. Question #20 of 48Question ID: 606808 What Are the Biggest Disadvantages of Annuities? The accumulation unit's value is used to calculate the total value of the account. Question #44 of 48Question ID: 606797 A) a minimum rate of return is guaranteed. Lifetime vs. fixed period annuities An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. Annuities due are a type of annuity where payments are made at the beginning of each payment period. 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. Reference: 12.1.1 in the License Exam. B)Life annuity with period certain. D)Variable annuity. Distributions to the annuitant will fluctuate during the payout period. With variable annuities policyholders can choose from a number of investment opportunities. B)Fixed annuity contract with a discussion regarding timing risk However, it does guarantee payments for life (mortality). The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A)II and III A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. A) Only during the payout period. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. A)III and IV. Owners of variable annuities, like owners of mutual fund shares, may vote on changes in investment policy and for an investment adviser. The fees on variable annuities can be quite hefty. 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. \hspace{10pt} \text{Office salaries} & \underline{234,000} & \hspace{10pt} \text{Medicare tax withheld} & 15,210\\ A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. An investor who has purchased a nonqualified variable annuity has the right to: Variable annuities must be registered with: All of the following statements concerning a variable annuity are correct EXCEPT: D) variable annuities will protect an investor against capital loss. It may be used by nongovernmental . *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. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? They offer broad diversification in the securities market and potential growth, all while using the power of tax deferral. Try D) payments continue until age 70-. D)I and II. A) each annuity unit's value is fixed, but the number of annuity units varies with time. The value of these units varies with the performance of the separate account. Licensed to sell Variable Annuities in the following state(s): FL, TX . In the case of deferred annuities, this is often referred to as the accumulation phase. 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. For example, when paying rent, the rent payment (PMT) . C) value of underlying securities held in the separate account. D) Variable annuities. Reference: 12.3.1 in the License Exam. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. an annuitant dies sooner than expected. A) A variable annuity While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. The features of variable deferred annuities are many. a variable annuity has which of the following characteristics 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 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. B) II and III savingsbondsGroupinsurance$198,74451,71415,21030,42045,630$341,718, Tax rates assumed: No software installation. B) Life annuity. Question #22 of 48Question ID: 606803 A trend makes considerable influence or impact. savingsbonds30,420Groupinsurance45,630$341,718\begin{array}{lrlr} What Are Ordinary Annuities, and How Do They Work (With Example)? The separate account performance compared to last month's performance. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. An annuity is an insurance product that promises to pay out income at a future date based on invested funds. Fixed annuities. Over the past five years, 's dividend yield has averaged % per year. Question #17 of 48Question ID: 606802 A) 2800. e) Are From the United States and Log on every day independently? The investor has already paid tax on the contributions but the earnings have grown tax-deferred. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? C)II and IV. D) each annuity unit's value varies with time, but the number of annuity units is fixed. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. How Are Nonqualified Variable Annuities Taxed? must be filed with FINRA. Which of the following is characteristic of variable annuities? Portfolio Compliance Risk Analyst Job in Newark, NJ at Prudential Reference: 12.1.4.1 in the License Exam. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. D)an accounting measure used to determine payments to the owner of the variable annuity. Question #32 of 48Question ID: 606815 Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. B) I and II. **Because common stocks are not fixed dollar investments, they have the opportunity to keep pace with inflation. You have 4 clients each expressing interest in a variable annuity contract. Reference: 12.3.4 in the License Exam. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. D) Keogh plans. Reference: 12.3.3 in the License Exam. 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? The payout compared to the initial payout upon annuitization. Question #24 of 48Question ID: 606806 The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. C) 100% tax free. B) II and IV. \hspace{10pt} Social security, 6%6\%6% on first $100,000\$100,000$100,000 of employee annual earnings D) a minimum of 10 years of variable payments, followed by additional variable payments for life When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 A) variable payments for 10 years, followed by fixed payments for life. Simple and general annuities problems with solutions C)II and III. The value of a variable annuity is based on the performance of an underlying portfolio of sub accounts selected by the annuity owner. D) Joint and last survivor annuity. B) The death benefit cannot ever be more than the guaranteed benefit. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. B) II and IV. Which is it? have investment risk that is assumed by the investor Your customer in his early 30s has received a modest inheritance from a relative. C) There is no tax as the withdrawal is considered return of capital. B) the client may vote for the board of directors or board of managers. *Waiver of premium is a benefit available on qualified life insurance contracts, usually in the form of a rider, which provides for the waiver of premium payments that fall due while the policyholder is totally disabled. *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. For a retired person, which of the following investments would provide the greatest protection against inflation? Reference: 12.3.3 in the License Exam. Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices. IBM is a global brand and has its presence in 170 countries and operates . The following changes have been incorporated into Special Publication 800145, as of the date indicated - . How Variable Life Insurance Works: Pros and Cons - ValuePenguin D)variable annuities. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. 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. C) II and IV. D)Investment risk. C)the invested money will be professionally managed according to the issuers' investment objectives. Reference: 12.1.2 in the License Exam. 7 - Annuities Flashcards | Quizlet D)It cannot be determined until the April return is calculated. a variable annuity does not guarantee an earnings rate of return. A security is any investment for profit with management performed by a third party. C)I and III. Your client has a large sum of money to invest from the proceeds of the sale of his home. A) The policy provides a minimum guaranteed death benefit. Question #13 of 48Question ID: 606822 B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. D) I and III . Complete a blank sample electronically to save yourself time and money. Distribution can take place before or during any solicitation for sale. None of the other investments listed here offer tax-deferred growth. Universal variable life policies What are the different types of annuities? | III If the owner of a variable annuity dies during the accumulation period, any death benefit will: withdraw funds without any tax consequences. He originally invested $29,000 4 years ago; it now has a value of $39,000. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). The number of annuity units is fixed at the time of annuitization. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. C) I and III. PDF The NIST definition of cloud computing C) The investor's concerns about taxes. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. But again, the need to designate beneficiaries is not an issue for this annuitant. Variable Annuities. D) II and IV. Outgoing personality with the ability to develop relationships (i.e., "People Person") and a sincere desire to help others Fearless, positive attitude, and willingness to be accountable for results Organized, detail-oriented, and excellent time-management skills A desire for continuous learning During the accumulation phase, you make purchase payments. A)II and IV. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? B)part earnings and part cost basis B)II and III. C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. B) I and II. The accumulation period of a variable annuity may continue for many years. *Annuity death benefits are generally paid in a lump sum. 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. Once a variable annuity has been annuitized: Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. must provide full and fair disclosure. C)none of these. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. Reference: 12.1.4.2 in the License Exam. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. (Check all that apply.) Reference: 12.1.2.1.1. in the License Exam. D)Any tax due is deferred. Question #37 of 48Question ID: 606817 Variable annuities must be registered with: B) value of annuity units. B)FINRA. Chapter 6-Classification Annuities Flashcards | Quizlet
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