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variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. CDs insured by the FDIC. 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. 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? On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). A)the number of annuity units becomes fixed when the contract is annuitized. 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. This guideline has been prepared for use by Federal agencies. Job Classification: Corporate - Legal and Compliance. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. An annuity may be purchased under all of the following methods EXCEPT: B)I and IV. b) What probability is the 20%20 \%20% mentioned above? C) Unit refund life option used to escrow late or otherwise delinquent premium payments. B) The entire $10,000 is taxable as ordinary income. C) taxed as ordinary income only to the extent of earnings. D) I and IV. A joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. All of the following statements concerning a variable annuity are correct EXCEPT: B)II and III. If the annuitant dies during the accumulation period, his/her beneficiary will receive the promised annuity payments. B)Value of each annuity unit each month. Variable Annuities. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually The separate account is NOT likely to invest in: B) fixed payments for 10 years, followed by variable payments for life. A)2800. 6102..55.001) is being updated on an ongoing basis. D)0. But again, the need to designate beneficiaries is not an issue for this annuitant. If the client, who is in a 30% tax bracket, makes a random withdrawal of $15,000, what will the tax liability to the IRS be? Variable annuity salespeople must register with all of the following EXCEPT: The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? C. The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. must precede every sales presentation. C)the yield is always higher than bond yields. D)the safety of the principal invested. b. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero They can be classified by: Nature of the underlying investment - fixed or variable The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation. B) payments continue until the death of the primary owner. A) two people are covered and payments continue until the second death. Your client has a large sum of money to invest from the proceeds of the sale of his home. && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 Contributions to a nonqualified variable annuity are not tax deductible. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. This factor is used to establish the dollar amount of the first annuity payment. C) II and III. D) There is no guarantee regarding the investment results of the separate account. Fixed Annuity: A fixed annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Reference: 12.3.2.1 in the License Exam. B) I and III. a) What percentage of Facebook's users are from the United States? III) A hierarchy of corporate staff evaluates divisions' plans and performance. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract 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. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. A) Money market fund. During the accumulation phase, the number of accumulation units will increase as additional money is invested. Full-Time. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? c) Construct a contingency table showing all the joint and marginal probabilities. B)fixed in value until the holder retires. 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. If the account is annuitized, the investor has chosen a payout option. must provide full and fair disclosure. A)II and IV. A trend makes considerable influence or impact. Question #35 of 48Question ID: 606810 D) 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. must be filed with FINRA. *Only variable annuities have payout plans that provide the client income for life. *Variable annuity contracts must be sold by prospectus due to the characterization of the separate accounts as securities, which must be registered under the Securities Act of 1933 and the Investment Company Act of 1940. D) variable annuities may only be sold by registered representatives. C)none of these. *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. Investopedia does not include all offers available in the marketplace. D) II and III. What are the different types of annuities? | III Therefore, ordinary income taxes will apply to the entire $10,000. And, unlike a fixed annuity, variable annuities do not provide any guarantee that you will earn a return on your investment. Variable annuities involve underlying equity investments in a separate account. B) II and III. The owner of a variable annuity has all of the following rights EXCEPT the right to vote: a. for the Board of Trustees b. to change the separate account's investment objective c. for distributing income and capital gains d. for dissolutions of the trust for distributing income and capital gains. Variable annuity salespeople must be registered with FINRA and the state insurance department. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. *Distributions from a nonqualified plan represent both a return of the original investment made in the plan with after-tax dollars (a nontaxable return of capital) and the income from that investment. A variable annuity's separate account is: A)the state banking commission. Sample problems from Chapter 9 . A Variable Annuity Has Which of the Following Characteristics 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. Your customer, still working, informs you that she will be funding a variable annuity you have recommended from 2 sources: a refinancing of her primary home where she will be able to draw out equity that has built up since it was purchased 15 years ago, and cashing out another variable annuity that she recently purchased within the past 2 years without a lifetime income rider like the one you have recommended. Your client owns a variable annuity contract with an AIR of 4%. an annuitant lives longer than expected. C) II and III. Reference: 12.3.3 in the License Exam. *A variable annuity is a security and must be registered with the SEC, not FINRA. You can learn more about the standards we follow in producing accurate, unbiased content in our. 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? 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. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. B)FINRA. 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. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. 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. Reference: 12.1.1 in the License Exam. C) III and IV The separate account performance compared to an assumed interest rate. 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: B) 0. Salaries:SalessalariesWarehousesalariesOfficesalaries$670,000110,000234,000$1,014,000Deductions:IncometaxwithheldSocialsecuritytaxwithheldMedicaretaxwithheldU.S. Herpes Zoster has all of the following characteristics except: Group of answer choices. A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. U.S. Securities and Exchange Commission. D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk.
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