no. Question #25 of 48Question ID: 606819 A) two people are covered and payments continue until the second death. C)none of these. D) I and IV. B) payments continue until the death of the primary owner. A fixed annuity is an insurance contract that pays a guaranteed rate of interest on the owner's contributions and later provides a guaranteed income. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. C)The entire $10,000 is taxable as ordinary income. B) life income The tax on this is $2,800 ($10,000 x 28%). The earnings on dollars invested into a variable annuity accumulate tax deferred, which is why variable annuities are popular products for retirement accumulation. A) Only during the payout period. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. A joint-and-last-survivor annuity is a payout option where: B)suitable regardless of funding sources A variable annuity is both an insurance and a securities product. B)I and III. 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 . While a variable annuity has the benefit of tax-deferred growth, its annual expenses are likely to be much higher than the expenses of a typical mutual fund. I. D) I and IV. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. C) The insurance company. D)variable annuities offer the investor protection against capital loss. For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. C) the client assumes the investment risk. Distributions to the annuitant will fluctuate during the payout period. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. D)Variable annuity contract with a discussion regarding legislative risk, A VA with its investments in the separate account subject to market risk would not align with the customer's objective. How Are Nonqualified Variable Annuities Taxed? On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ B)II and III. A)I and IV. Question #47 of 48Question ID: 606813 C)III and IV. C) II and IV. A)variable annuities will protect an investor against capital loss. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? This makes a total of $4,000 tax and penalty paid on the random withdrawal. Annuities are complicated products, so that may be easier said than done. IV. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is: *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. III) A hierarchy of corporate staff evaluates divisions' plans and performance. They can be classified by: Nature of the underlying investment - fixed or variable About Us Which of the following is NOT an accurate statement concerning a variable life insurance contract? B) I and III. 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. B) Life annuity with period certain Though there is no beneficiary designation during the annuitization, this is not an issue for this annuitant. A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units. B)I and IV. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. C. A) The policy provides a minimum guaranteed death benefit. Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Eric W. Noreen, Peter C. Brewer, Ray H Garrison. The separate account performance compared to last month's performance. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. A) II and IV. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. This compensation may impact how and where listings appear. B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract The entire amount is taxed as ordinary income. D) III and IV. *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. 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. Distributed along a dermatome. A) There is no risk in a variable annuity. D) payments continue until age 70-. They are more suitable for individuals who can fund the annuity with cash, want to supplement existing retirement benefits they have already funded, are comfortable with the market risk associated with a VA separate account portfolio and anticipate a long retirement. 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? B) The entire $10,000 is taxable as ordinary income. Question #36 of 48Question ID: 606805 an annuitant dies sooner than expected. If the annuitant dies during the accumulation period, his/her beneficiary will receive the promised annuity payments. Your customer in his early 30s has received a modest inheritance from a relative. D) Age 27, saving for first home. What is the annual cash flow generated from the new machine? When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Of the four client profiles below which might be the best suited for a variable annuity recommendation? D) Variable annuities. A) Money market fund. A) 4000. A) The entire amount is taxed as ordinary income, because it is not life insurance. a variable annuity guarantees payments for life. Sample problems from Chapter 9 . The time period depends on how often the income is to be paid. D) I and IV The income was deferred from tax over the plan's life, so it is taxable as ordinary income once distributed. A)II and III. D) periodic payment deferred annuity. *Contributions to a nonqualified annuity are made with the owner's after-tax dollars. All of the following statements regarding variable annuities are true EXCEPT: A registered representative explaining variable annuities to a customer would be CORRECT in stating that: D)I and III. B) The death benefit cannot ever be more than the guaranteed benefit. A) periodic payment immediate annuity. B) payment guarantee. Annuities are similar to other forms of investing in that the owner invests money with the hope that it will gain in value, but annuities also come with higher fees than most mutual funds. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. A) defined contribution plans. C)the number of annuity units is fixed, and their value remains fixed. A variable annuity has two phases: an accumulation phase and a payout (annuitization) phase. Question #11 of 48Question ID: 606816 C) I and III. His objective is monthly income that he can receive after he retires to supplement his small pension and social security benefits. 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. Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 Surrender fees and penalties for early withdrawal. The value of accumulation and annuity units varies with the investment performance of the separate account. The number of accumulation units is always fixed throughout the accumulation period. C) II and III. B)Variable annuities. Before buying a variable annuity, investors should carefully read the prospectus to try to understand the expenses, risks, and formulas for calculating investment gains or losses. Your customer in his early 30s has received a modest inheritance from a relative. C) II and IV. During the . Clusters of vesicles in various stages. When a variable annuity contract is annuitized, the number of annuity units is fixed. The offers that appear in this table are from partnerships from which Investopedia receives compensation. B) I and IV. D) Joint and last survivor annuity. A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. Question #40 of 48Question ID: 606800 For an investor, which of the following is the most important factor in determining the suitability of a variable annuity investment? A) mortality guarantee. withdraw funds without any tax consequences. a variable annuity does not guarantee an earnings rate of return. A) I and IV. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. Try *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. Investopedia does not include all offers available in the marketplace. A) waiver of premium \text{Salaries:} && \text{Deductions:}\\ 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. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. are purchased primarily for their insurance features All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. Lifetime vs. fixed period annuities B) II and III. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. A) I and IV. Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. 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. Fixed annuities typically earn at a lower, stable rate. Generally, a life-only contract pays the most per month because payments cease at the annuitant's death. "Variable Annuities: What You Should Know," Page 3. D) Life annuity with 10-year period certain. 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. A) a minimum rate of return is guaranteed. A) I and II. do not have a separate account Though its stated return might not be as high as the other choices potential returns, only a fixed annuity fits the objective and risk averse traits of this client. 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. D) 4500. 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 variable annuity payout is determined by comparing account performance with AIR, and this month's payout with last month's payout. B)II and III. A) Fixed annuities. A) mortality guarantee. Therefore, ordinary income taxes will apply to the entire $10,000. D) accumulation shares. Nicks Enterprises has purchased a new machine tool that will allow the company to improve the efficiency of its operations. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. Every annuity has some characteristics in common. 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. Reference: 12.1.2 in the License Exam. Variable annuities were introduced in the 1950s as an alternative to fixed annuities, which offer a guaranteedbut often lowpayout during the annuitization phase. the state insurance commission. This cloud model is composed of five essential characteristics, three service models, and four deployment models. *An immediate annuity has no accumulation period. Post navigation B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. d) What is the probability that a user is from the United States, given that he or she logs on every day? \end{array} Variable annuity salespeople must be registered with FINRA and the state insurance department. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. On an annual basis, the machine will produce 20,000 units with an expected selling price of $10, prime costs of$6 per unit, and a fixed cost allocation of $3 per unit. If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. A) mutual fund units. A)the state banking commission. B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually Question #42 of 48Question ID: 606830 The investor purchased accumulation units. \hspace{7pt} a. December 303030, to record the payroll. D) Growth mutual funds. Reference: 12.2.1 in the License Exam. For a retired person, which of the following investments would provide the greatest protection against inflation? C) III and IV. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. C) the yield is always higher than bond yields. 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 IV. C)the SEC. 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. guarantees payments for a certain period of time. Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. Variable Annuities. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. With regard to a variable annuity, all of the following may vary EXCEPT: B)corporate stock. Because this is not guaranteed, the policyowner bears the investment risk. He makes the following four statements, all of which are true EXCEPT A)I and IV. The number of annuity units is fixed at the time of annuitization. All of the following statements about variable annuities are true EXCEPT: If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? Universal variable life policies b) What probability is the 20%20 \%20% mentioned above? A customer has a nonqualified variable annuity. D) Any time before the accumulation period. A)the number of annuity units becomes fixed when the contract is annuitized. The growth portion is taxed as a capital gain. have investment risk that is assumed by the investor *A periodic payment immediate annuity is a contradiction in terms. Then find the probability of the event. C)the yield is always higher than bond yields. If this client is in the payout phase, how would his April payment compare to his March payment? C) Corporate bonds. variable annuity without paying tax at the time of the transfer. a variable annuity guarantees an earnings rate of return. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. A separate account will invest in a number of different securities. A) I and II A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). a variable annuity does not guarantee an earnings rate of return. *A variable annuity may only be surrendered during the accumulation period. Following the transition to T+1 in the U.S. markets, Commission staff will continue to work with industry leaders, public interest advocates, investors and other regulators to assess the future feasibility of a T+0 settlement standard cycle, and seek to identify ways to overcome the challenges associated with such a move, as articulated in the . III. A variable annuity's separate account is: A separate account will invest in a number of different securities. a variable annuity guarantees an earnings rate of return. If the account is annuitized, the investor has chosen a payout option. A) II and III. The wage for applicants for this position is $45,979.00 per year. 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. Based on the information given in the question, the VA recommendation would not be suitable. must be filed with FINRA. Future annuity payments will vary according to the separate account's performance. During the accumulation phase, you make purchase payments. is required by the Securities Act of 1933. Which of the following is characteristic of variable annuities? 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. *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. D) Capital gains tax on earnings exceeding basis. C)not suitable because a lifetime income rider is only for someone who is already retired C)Corporate bonds. Herpes Zoster has all of the following characteristics except: Group of answer choices. He earned the Chartered Financial Consultant designation for advanced financial planning, the Chartered Life Underwriter designation for advanced insurance specialization, the Accredited Financial Counselor for Financial Counseling and both the Retirement Income Certified Professional, and Certified Retirement Counselor designations for advance retirement planning. A)II and IV. Premiums made into the annuity purchase accumulation units. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. C) insurance guarantee. The tax on this amount is $3,000. A) I and II Variable annuity Which of the following is characteristic of fixed annuities? D)accumulation units. Reference: 12.3.3 in the License Exam, Question #34 of 48Question ID: 606834 Question #22 of 48Question ID: 606803 Question #20 of 48Question ID: 606808 D)II and III. C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. D) the number of annuity units becomes fixed when the contract is annuitized. Your client has $50,000 to invest.
Rogers Pass Montana Population, Chatfield Reservoir Water Temperature By Month, Does Xtend Original Bcaa Have Caffeine, Articles A