Therefore, variable annuities must be registered with the state insurance commission and the Securities and Exchange Commission. B)I and II Therefore, ordinary income taxes will apply to the entire $10,000. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: A variable annuity is a tax-deferred retirement vehicle that allows you to choose from a selection of investments and then pays you a level of income in retirement that is determined by the performance of the investments you choose. Options. A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. A registered person recommends the purchase of a variable annuity to one of his clients. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. A customer has a nonqualified variable annuity. 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) The investor's concerns about taxes. 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. Question #20 of 48Question ID: 606808 *An immediate annuity has no accumulation period. Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. C) taxed as ordinary income only to the extent of earnings. As with most retirement account options, withdrawals before the age of 59 will result in a 10% tax penalty. D)suitable due to the relative safety of the investment. Essential Characteristics: Variable annuities are riskier than fixed annuities because the underlying investments may lose value. C) number of accumulation units. 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. What percentile is represented by $710? B) It will be lower. IBM Noida, Uttar Pradesh, India4 weeks agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. Reference: 12.1.2.1.1. in the License Exam. A) I and II. B)Tax-free municipal bonds Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? P=525p2+65,326p185,000E=326p+185,000P=-525 p^{2}+65,326 p-185,000 \quad E=-326 p+185,000P=525p2+65,326p185,000E=326p+185,000. Reference: 12.3.2.4 in the License Exam. B)Capital gains taxation on the earnings withdrawn in excess of the owner's basis. Every annuity has some characteristics in common. Variable annuities should be considered long-term investments due to the limitations on withdrawals. A) a minimum rate of return is guaranteed. B)Life annuity with period certain. On any device & OS. Nicks Enterprises has purchased a new machine tool that will allow the company to improve the efficiency of its operations. However, if you take a withdrawal during the contractssurrender period, which can be as long as 15 years, youll generally have to pay a surrender fee. are purchased primarily for their insurance features D)I and II. 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. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. A guaranteed lifetime annuity promises to pay the owner an income for the rest of their life. 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 All of the following statements about variable annuities are true EXCEPT: Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. Reference: 12.2.1 in the License Exam. C)II and IV. D) be paid to the issuing company to complete the plan. B) I and III. A variable annuity's separate account is: \hspace{7pt} b. December 303030, to record the employers payroll taxes on the payroll to be paid on December 313131. D) II and IV. 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. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. When the annuitization option is selected, each payment represents both capital and earnings. When the annuitization option is selected, each payment represents both capital and earnings. 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? B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) C)Growth mutual funds D)Dow Jones Industrial Average. The number of accumulation units can rise during the accumulation period. is required by the Securities Act of 1933. 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 Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but theres also a risk that the account will fall in value. B)4200. A)exempt from taxes do not have a separate account Annuities due are a type of annuity where payments are made at the beginning of each payment period. A) Money market fund. D) not suitable because a lifetime income rider is only for someone who is already retired. D)II and III. B)part earnings and part cost basis Based on this information the RR should: For example, when paying rent, the rent payment (PMT) III) A hierarchy of corporate staff evaluates divisions' plans and performance. Classifying annuities There are many categories of annuities. A trend makes considerable influence or impact. B)variable annuities are classified as insurance products. 5 Q All of the following are characteristics of variable whole life EXCEPT the premium is level there is no guaranteed cash value there is no guaranteed minimum death benefit. The annuity unit's value represents a guaranteed return. A) not suitable 222. She may choose to receive monthly payments for the rest of her life. C) be returned to the separate account. C) III and IV withdraw funds without any tax consequences. C) II and III. B)Value of each annuity unit each month. C)such an annuity is designed to combat inflation risk. Investopedia does not include all offers available in the marketplace. Table1. *The customer, in the accumulation stage of the annuity, is holding accumulation units. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 A 3 D)I and III. What Are Ordinary Annuities, and How Do They Work (With Example)? C)II and III. The AG49-A Revisions 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 must be registered with: A client has purchased a nonqualified variable annuity from a commercial insurance company. (Check all that apply.) D) II and III. Variable annuity salespeople must register with all of the following EXCEPT: *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. *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. I. If this client is in the payout phase, how would his April payment compare to his March payment? A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. approve changes in the plan portfolio. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. If the customer takes a withdrawal of $10,000, what are the tax consequences? *The investor has already paid tax on the contributions but the earnings have grown tax-deferred. Question #31 of 48Question ID: 606836 A)variable annuities will protect an investor against capital loss. Question #38 of 48Question ID: 606798 Question #16 of 48Question ID: 606807 A) be paid to a designated beneficiary. B)Two-thirds of the withdrawal is taxable as ordinary income. 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. 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 joint life with last survivor contract covers multiple annuitants and ceases payments at the death of the last surviving annuitant. A prospectus for a variable annuity contract: A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. A)III and IV. B)I and III. A prospectus for a variable annuity contract: These contracts cover both lives and will continue to make payments until the last spouse dies. B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually A) variable annuities offer the investor protection against capital loss. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. A demonstrated ability to quickly learn and continuously develop functional knowledge and an understanding of company products as well as administrative, claims, underwriting and marketing functions. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement If the customer takes a withdrawal of $10,000, what are the tax consequences? In March, the actual net return to the separate account was 8%. Which of the following statements regarding variable annuities are TRUE? D)an accounting measure used to determine payments to the owner of the variable annuity. A)number of annuity units. 6102..55.001) is being updated on an ongoing basis. If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? a. 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. Based only on these facts, the variable annuity recommendation is A)unsuitable because the return on something as conservative as a variable annuity tends to be low. B) II and III. A)II and IV. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract Determine the revenue equation given the profit and expense equations. II. Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. A) II and III. Because this is not guaranteed, the policyowner bears the investment risk. A)II and III The number of annuity units varies. When a variable annuity contract is annuitized, the number of annuity units is fixed. D)Variable annuity. Complete a blank sample electronically to save yourself time and money. D) III and IV. The number of accumulation units is always fixed throughout the accumulation period. Reference: 12.2.1 in the License Exam. D) payments continue until age 70-. D) II and IV. The nature of the securities invested in-bonds and growth stocks-makes it necessary that sales representatives and their principals be licensed in securities as well as insurance. Round to the nearest hundredth of a percent. C)the invested money will be professionally managed according to the issuers' investment objectives. D) I and II. is required by the Securities Act of 1933. All of the following statements about variable annuities are true EXCEPT: Question #46 of 48Question ID: 606796 However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. Universal variable life policies A) II and III. The time period depends on how often the income is to be paid. B)I and III. Variable annuities are designed to combat inflation risk. D)Joint and last survivor annuity. Securely download your document with other editable templates, any time, with PDFfiller. They are also not considered suitable for anyone who anticipates needing a lump sum within a short time frame to fund other endeavors. That can adversely affect your returns over the long term, compared with other types of investments. Immediate life annuity. 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. Reference: 12.1.2.1.2 in the License Exam. D) an accounting measure used to determine the contract owner's interest in the separate account. A variable annuity is both an insurance and a securities product. 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. Here is how guaranteed lifetime annuities work. no. 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: If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. Which of the following is not a characteristic of a program module? Suggesting that loans or drawing equity from a home to fund VA contracts have also been targeted as abusive sales practices.
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