Your customer in his early 30s has received a modest inheritance from a relative. Investopedia requires writers to use primary sources to support their work. B) Municipal bonds. Facebook reports that 70%70 \%70% of their users are from outside the United States and that 50%50 \%50% of their users log on to Facebook daily. C) Mutual fund portfolio consisting of blue chip stocks A 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition The tax on this amount is $3,000. the SEC. Question #31 of 48Question ID: 606836 Which is it? Uses in Investing, Pros, and Cons, Indexed Annuity: Definition, How It Works, Yields, and Caps. D)II and III. Expert Answer. 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. Herpes Zoster has all of the following characteristics except: Group of answer choices. MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. All of the following are characteristics of a variable annuity, except: a. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? A variable annuity has two phases: an accumulation phase and a payout (annuitization) phase. The paper publication will not be rereleased. The figure below illustrates a six-month annuity with monthly payments. A) I and III. Reference: 12.3.1 in the License Exam. A) a minimum rate of return is guaranteed. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. C) taxed as ordinary income only to the extent of earnings. C) I and IV. B) The death benefit cannot ever be more than the guaranteed benefit. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. A 45-year-old investor takes a lump-sum distribution from a nonqualified variable annuity. How Are Nonqualified Variable Annuities Taxed? a life insurance holder lives longer than expected. b. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. This role is also eligible for annual short-term incentive compensation. D) a minimum of 10 years of variable payments, followed by additional variable payments for life. Fixed annuities typically earn at a lower, stable rate. *A variable annuity may only be surrendered during the accumulation period. And, unlike a fixed annuity, variable annuities do not provide any guarantee that you will earn a return on your investment. 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. C) III and IV. B) be paid to any legal heirs as recognized by the annuitant's state of domicile. C)prime rate. C)insurance companies keep variable annuity funds in separate accounts from other insurance products. B)II and III. The growth portion is taxed as a capital gain. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. A customer has a nonqualified variable annuity. B) II and IV. Final answer. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. The tax on this is $2,800 ($10,000 x 28%). B)corporate stock. Immediate annuities purchase annuity units directly. Can I Borrow from My Annuity for a House Down Payment? Question #22 of 48Question ID: 606803 222. These contracts come with high surrender charges. Usually the term "annuity" relates to a contract between an individual and a life insurance company. *An immediate annuity has no accumulation period. How Good of a Deal Is an Indexed 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. D) the payout plans provide the client income for life. B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually C)III and IV. A)a lifetime withdrawal benefit (LWB) or lifetime income benefit is generally in the form of a rider attached to the contract which will come at a cost to the annuitant A) Fixed Annuity Reference: 12.3.2.1 in the License Exam. *The customer, in the accumulation stage of the annuity, is holding accumulation units. Because they have a separate account in which the investor assumes the investment risk, they can only be sold by individuals with both insurance and securities licenses. *Contributions to a nonqualified variable annuity are not tax deductible. A)II and III. Suppose that 20%20 \%20% of their users are United States users who log on daily. All of the following statements concerning a variable annuity are correct EXCEPT: A) I and III. C) A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. \hspace{10pt} State unemployment (employer only), 3.8%3.8\%3.8% Reference: 12.2.1 in the License Exam. C) value of underlying securities held in the separate account. Variable annuities are riskier than fixed annuities because the underlying investments may lose value. These include white papers, government data, original reporting, and interviews with industry experts. D)suitable due to the relative safety of the investment. B)II and III. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed If the customer takes a withdrawal of $10,000, what are the tax consequences? B) taxed as ordinary income. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. B) 100% taxable. A) I and II It is the starting point of motivation because they generate emotions. Reference: 12.3.1 in the License Exam, Question #30 of 48Question ID: 606833 A)contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. \end{array} A) The fact that the annuity payment may increase or decrease. Question #26 of 48Question ID: 606811 who needs access to the sum invested at later time. Round to the nearest hundredth of a percentile. C) I and III. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. C)suitable due to the death benefit features of a variable annuity. approve changes in the plan portfolio. B) the state insurance department. Try U.S. Securities and Exchange Commission. If you die before the payout phase, your beneficiaries may receive a. D) II and IV. The value of a variable annuity is based on the performance of an underlying portfolio of sub accounts selected by the annuity owner. Diagnosis is made by punch biopsy. Once a variable annuity has been annuitized: The number of accumulation units is always fixed throughout the accumulation period. Your 55-year-old client invested $50,000 four years ago in a nonqualified variable annuity. Distribution can take place before or during any solicitation for sale. \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ C) suitable regardless of funding sources A) a minimum rate of return is guaranteed. Reference: 12.1.2 in the License Exam. Variable annuities are designed to combat inflation risk. For an investor, which of the following is the most important factor in determining the suitability of a variable annuity investment? An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. A)number of annuity units. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Reference: 12.1.2.1.1 in the License Exam. 111. 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? This recommendation is: "Variable Annuities: What You Should Know," Page 10. *The most important consideration in purchasing a variable annuity is to be aware that benefit payments will fluctuate with the investment performance of the separate account. Early withdrawal is either removal of funds from a fixed-term investment before the maturity date, or the removal of funds from a tax-deferred investment account or retirement savings account before a prescribed time. Which of the following are defined as securities? A) each annuity unit's value is fixed, but the number of annuity units varies with time. 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. Reference: 12.2.1 in the License Exam. C) insurance guarantee. B)suitable regardless of funding sources A) partially a tax-free return of capital and partially taxable. \hspace{7pt} a. December 303030, to record the payroll. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. III. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. 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 is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of sub accounts. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. B) Corporate debt securities D) Any time before the accumulation period. must precede every sales presentation. A) an accounting measure used to determine payments to the owner of the variable annuity. A) The fact that the annuity payment may increase or decrease. an annuitant lives longer than expected. A) 4000. 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. The distribution of questions by topic is not intended to represent the 39) A variable annuity has the following guarantees: [PDF] Understanding your variable annuity UBS Variable annuities are long-term investment vehicles that with these securities as well insurance company and do not apply to the investment The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Reference: 12.1.2.1.1 in the License Exam. a variable annuity does not guarantee payments for life. national origin, genetics, disability, age, veteran status, or any other characteristic protected by law. Question #36 of 48Question ID: 606805 A. C)II and III. C)I and IV. have investment risk that is assumed by the investor *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. D)Joint and last survivor annuity. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . the agent must be licensed in both insurance and securities. D) variable annuities may only be sold by registered representatives. \hspace{7pt} b. December 303030, to record the employers payroll taxes on the payroll to be paid on December 313131. D)all return of cost basis and nontaxable, Annuitized payments from a variable annuity are viewed for tax purposes as part earnings and part cost basis. The original investment has grown to a value of $60,000. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. Question #45 of 48Question ID: 606795 C) value of underlying securities held in the separate account. D) a variable annuity contract is subject to fluctuating values due to market fluctuations of the underlying separate accounts. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. D)Municipal bonds. C)It will be higher. Your 65-year-old client owns a nonqualified variable annuity. the state insurance commission. Question #43 of 48Question ID: 606809 B)Life annuity with period certain. The most popular type of variable annuity is a deferred annuity. What Are the Distribution Options for an Inherited Annuity? C) be returned to the separate account. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. They are also riddled with fees, which can cut into profits. Dividing the funds available so as to fund 2 separate contracts, whether they be joint with last survivor or life income, would not be cost efficient for spouses. Then find the probability of the event. A customer, who has contributed to an IRA and to an employer matching 401(k) plan continuously for many years, wants to purchase an annuity contract to add additional monthly income once retired. D) There is no guarantee regarding the investment results of the separate account. Question #17 of 48Question ID: 606802 C)Corporate bonds. Reference: 12.1.4 in the License Exam. A) 2800. Question #12 of 48Question ID: 606814 This includes transportation, food, lodging, and entertainment. D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. \hspace{10pt} \text{Sales salaries} & \$\hspace{5pt} 670,000 & \hspace{10pt} \text{Income tax withheld} & \$198,744\\ The amount of the purchase payments that go into the account may be less than you paid because fees were taken out of the purchase payments. C)II and IV. 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. Her intent was to use the funds for the down payment on a house after graduation. A separate account will invest in a number of different securities. VAs, blue chip mutual fund portfolios, ETFs and ETNs are all tied to market performance in some way and have risk characteristics that would not align in terms of suitability for this client. Which of the following is not a characteristic of a program module? D) the payout plans provide the client income for life. A) II and IV. When a partial withdrawal is made from an annuity, the earnings are considered to be taken out first for tax purposes (or LIFO). Reference: 12.2.1 in the License Exam. C) none of these. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. A)Fixed annuity contract with a discussion regarding purchasing power risk A single lump-sum investment is made, and payments begin immediately, since the investor has purchased annuity units. IBM Noida, Uttar Pradesh, India4 weeks agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. *A variable annuity does not guarantee an earnings rate because earnings will depend on the performance of the separate account. 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. The income was deferred from tax over the plan's life, so it is taxable as ordinary income once distributed. 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 . a variable annuity does not guarantee payments for life. Question #14 of 48Question ID: 606823 C) 10% penalty plus payment of ordinary income tax on all funds withdrawn exceeding basis. must be filed with FINRA. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. A) I and IV. D) expense guarantee. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. . If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. The investor purchased accumulation units. B)I and III. 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. A) II and III. . II. b. A) periodic payment immediate annuity. When the first party dies, the annuity payment is made to the survivor. D) III and IV. 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. D) II and IV. Once a customer annuitizes a variable annuity, which of the following statements are TRUE? *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. The customer, in the accumulation stage of the annuity, is holding accumulation units. Similarly, CDs are insured, thereby eliminating risk and guaranteeing a return. B) The investor's marital status. A)II and IV. He makes the following four statements, all of which are true EXCEPT Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. For a retired person, which of the following investments would provide the greatest protection against inflation? The accumulation unit's value is used to calculate the total value of the account. The following changes have been incorporated into Special Publication 800145, as of the date indicated - . If an investor has purchased an immediate variable annuity, which of the following statements best describe the investment? It was a lump-sum purchase. If the customer takes a withdrawal of $10,000, what are the tax consequences? C)Variable annuity contract with a discussion regarding interest rate risk D) I and III. B)variable annuities are classified as insurance products. 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. B) life income C) the yield is always higher than bond yields. C) each annuity unit's value and the number of annuity units vary with time. A)the number of annuity units becomes fixed when the contract is annuitized. *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 variable annuity guarantees an earnings rate of return. a variable annuity guarantees an earnings rate of return. C) III and IV Which of the following statements regarding variable annuities are TRUE? 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. D) payments continue until age 70-. Which of the following is NOT an accurate statement concerning a variable life insurance contract? *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children Her agent recommended she choose a variable annuity as a safe haven for the funds. Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. A) Capital gains taxation on the earnings withdrawn in excess of the owner's basis. A) 2800. Variable Annuity Advantages and Disadvantages, Guide to Annuities: What They Are, Types, and How They Work. B)unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. have investment risk that is assumed by the investor *With guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is not guaranteed because payments stop when the annuitant has received an amount equal to the principal account value or the contract term ends. Her agent recommended she choose a variable annuity as a safe haven for the funds. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. Future annuity payments will vary according to the separate account's performance. a. it performs a single task b. it is self-contained and independent of other modules c. it is relatively short d. all of the above are chamcleristics of a program module 7. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. Single payment deferred annuity. B)I and III. B) suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract A)defined contribution plans. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero Variable annuities operate in similar ways to . During the accumulation phase, you make purchase payments. The earnings are taxable but the cost basis is returned tax free. U.S. Securities and Exchange Commission. 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.
Characteristics Of Lily In The Giver,
Writ Am Milwaukee,
Avery Properties Jackson, Tn,
Articles A