a variable annuity has which of the following characteristics

B)suitable regardless of funding sources All of the following statements concerning a variable annuity are correct EXCEPT: A variable annuity is just a tax-deferred annuity in which you get to choose how the value of the annuity is invested. B)II and III. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero D)II and IV. Premiums made into the annuity purchase accumulation units. A)Joint tenants annuity. There are two elements that contribute to the value of a variable annuity: the principal, which is the amount of money you pay into the annuity, and the returns that your annuitys underlying investments deliver on that principal over the course of time. B) Exchange traded Funds (ETFs) or Exchange traded Notes (ETNs) Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 must precede every sales presentation. A) It will be higher. Variable annuity salespeople must be registered with FINRA and the state insurance department. Deal with mathematic Math is all about solving equations and finding the right answer. D)I and IV, Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. 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)cost of living. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. *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. B) fixed payments for 10 years, followed by variable payments for life. D) None, because it is the proceeds from a life insurance company. An investor owning which of the following variable annuity contracts would hold accumulation units? D) The fact that periodic payments into the contract may increase or decrease. Designed to protect against inflation. Explain what is meant by positive and negative A) Life-only annuity Can I Borrow from My Annuity for a House Down Payment? A) Joint tenants annuity. B) The entire $10,000 is taxable as ordinary income. Simple and general annuities problems with solutions If in the following year, the S&P 500 declined by 5%, the annuities value would remain at $107,000 because gains are locked in each year. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are Get Started. Variable Annuities Flashcards | Quizlet C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually C) Age 40, currently unemployed How Are Nonqualified Variable Annuities Taxed? In the case of deferred annuities, this is often referred to as the accumulation phase. Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 A guaranteed death benefit guarantees that the beneficiary will receive a death benefit if the annuitant dies before the annuity begins paying benefits. Of the 4 client profiles below, which might be the best suited for a variable annuity recommendation? In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: What is her total tax liability? *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. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. The number of annuity units rises once annuitization begins. Fixed annuities are not considered securities as return is guaranteed by the insurance company issuer. Reference: 12.3.1 in the License Exam, Question #30 of 48Question ID: 606833 Question #22 of 48Question ID: 606803 Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. D)II and III. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? During the accumulation phase, you make purchase payments. If a customer is about to buy a variable annuity contract and wants to select an annuity with a payout option providing the largest possible monthly payment, which of the following payout options would be most suitable? Solved The following are characteristics of a public | Chegg.com A prospectus for a variable annuity contract: If the customer takes a withdrawal of $10,000, what are the tax consequences? B) taxed as ordinary income. This role is also eligible for annual short-term incentive compensation. D)suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. The growth portion is taxed as a capital gain. Therefore only a fixed annuity could be considered as suitable. Classifying annuities There are many categories of annuities. B) The entire $10,000 is taxable as ordinary income. This chapter was updated on 15 December, 2005. Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: Question #33 of 48Question ID: 606832 A)exempt from taxes . PDF The NIST definition of cloud computing B) II and IV. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. D) 100% tax deferred. D)separate account may consist of mutual funds. Question #29 of 48Question ID: 606831 B)I and III. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. C) annuity units. It is the starting point of motivation because they generate emotions. D) I and IV. MetLife, Inc. Senior Customer Care Advocate Annuities ($22 per hour D) The investment risk is shared between the insurance company and the policyowner. There are two interest rates under fixed annuities. *Contributions to a nonqualified variable annuity are not tax deductible. A registered person recommends the purchase of a variable annuity to one of his clients. A registered representative recommends a variable annuity with an income rider to a client. D)A variable annuity, Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. A) number of annuity units. Annuity units are units of ownership when the contract is in the payout stage. B)variable annuities are classified as insurance products. I. Carefully look at your options when choosing an annuity. They are also riddled with fees, which can cut into profits. An individual who purchases a Life annuity is given protection against: the risk of living longer than expected The type of annuity that can be purchased with one monetary deposit is called a (n) Immediate annuity N purchases an annuity by making payments in an amount no less than $100 quarterly. &&& \underline{\underline{\$341,718}} Fixed Annuity, Retirement Annuities: Know the Pros and Cons. The downside was that the buyer was exposed to market risk, which could result in losses. Annuities due are a type of annuity where payments are made at the beginning of each payment period. 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. Your customer in his early 30s has received a modest inheritance from a relative. However, it does guarantee payments for life (mortality). C)suitable due to the death benefit features of a variable annuity. A) III and IV. an annuitant dies sooner than expected. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? A universal variable life policy should be purchased primarily for its insurance features, not its investment features. C)II and IV. *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) Keogh plans. Reference: 12.1.4.2 in the License Exam. All of the following are true about annuities EXCEPT: they have all the same characteristics as life insurance. Question #14 of 48Question ID: 606823 A) Ordinary income tax on earnings exceeding basis. Contributions to a nonqualified variable annuity are not tax deductible. C) It will stay the same. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. Based only on these facts, the variable annuity recommendation is Which of the following is NOT an accurate statement concerning a variable life insurance contract? Her agent recommended she choose a variable annuity as a safe haven for the funds. Deferred Annuity Definition, Types, How They Work, What Is a Fixed Annuity? Life with period certain will produce a smaller check for life because the insurance company will guarantee payments to a beneficiary for a certain period of time designated in the contract should the annuitant die within that period. C) III and IV. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. Senior Customer Care Advocate Annuities ($22 per hour) in Warwick must provide full and fair disclosure. Most annuities will not allow you to withdraw additional funds from the account once the payout phase has begun. An accumulation unit in a variable annuity contract is: Salaries:SalessalariesWarehousesalariesOfficesalaries$670,000110,000234,000$1,014,000Deductions:IncometaxwithheldSocialsecuritytaxwithheldMedicaretaxwithheldU.S. A) I and II A) Any tax due is deferred. B)Universal variable life policy. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. The accumulation unit's value is used to calculate the total value of the account. What are the characteristics of annuity? - Wise-Answers Reference: 12.3.4 in the License Exam. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. The remainder of the premium is invested in the separate account. This compensation may impact how and where listings appear. A)II and IV. B) I and IV. *An immediate annuity has no accumulation period. C)Life annuity. b. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. Over the past five years, 's dividend yield has averaged % per year. A) Dow Jones Industrial Average. A trend is formed from non-repetitive actions of people. C) a variable annuity contract does not guarantee any type of return The owner of a variable annuity has all of the following rights EXCEPT Reference: 12.3.3 in the License Exam. the state insurance commission. D) II and IV. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 Your client owns a variable annuity contract with an AIR of 4%. A) mortality guarantee. Question #11 of 48Question ID: 606816 Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. a variable annuity guarantees an earnings rate of return. D)I and III. You can tailor the income stream to suit your needs. C)Growth mutual funds Variable Annuities Flashcards | Quizlet We also reference original research from other reputable publishers where appropriate. II) It has an internal capital market wherein each division competes for funds. All of the following statements about variable annuities are true EXCEPT: C) the client assumes the investment risk. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. D) Variable annuities. When the first party dies, the annuity payment is made to the survivor. With regard to a variable annuity, all of the following may vary EXCEPT: B)value of annuity units. Variable Annuity: Definition and How It Works, Vs. Fixed Annuity C) I and IV. A)It will stay the same. who needs access to the sum invested at later time. All of the following are accurate statements to make to the client EXCEPT C) III and IV.