The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. C) III and IV. "Variable Annuities: What You Should Know," Page 10. This recommendation is: Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. D)II and IV. a variable annuity has which of the following characteristics A) I and II How does an indexed annuity differ from a fixed annuity? The number of annuity units is fixed. C) There is no tax as the withdrawal is considered return of capital. The growth portion is taxed as a capital gain. 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. Variable Annuities | Investor.gov 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. His objective is monthly income that he can receive after he retires to supplement his small pension and social security benefits. A) partially a tax-free return of capital and partially taxable. A) the investment portfolio is managed professionally. D) I and III. 6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Dec 2005 B) The entire $10,000 is taxable as ordinary income. B) variable annuities are classified as insurance products. B)I and IV. To comply with Regulation SP, a brokerage firm is required to do all of the following EXCEPT: A) deliver an annual notice of its information collecting and sharing policies to all customers. C)municipal bonds. C) insurance companies keep variable annuity funds in separate accounts from other insurance products. The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. C) The investor's concerns about taxes. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. The fees on variable annuities can be quite hefty. Assuming that the payroll for the last week of the year is to be paid on December 313131, journalize the following entries: The remainder of the premium is invested in the separate account. A) taxed at a reduced rate. *The investor has already paid tax on the contributions but the earnings have grown tax-deferred. B) the safety of the principal invested. C)prime rate. Simple and general annuities problems with solutions D) II and IV. A) It will be higher. These contracts come with high surrender charges. One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur. What Are the Risks of Annuities in a Recession? Deferred Annuity Definition, Types, How They Work, What Is a Fixed Annuity? The holder of a variable annuity receives the largest monthly payments under which of the following payout options? a. C) III and IV The trial of the assassins commenced on the following day; and the evidence being so clear, they were both found guilty, and condemned, to be broken alive on the wheel. B) Corporate debt securities Question #45 of 48Question ID: 606795 Your client has a large sum of money to invest from the proceeds of the sale of his home. A trend is formed from non-repetitive actions of people. A) III and IV. A)III and IV. Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. The owner of a variable annuity has all of the following rights EXCEPT A) The policy provides a minimum guaranteed death benefit. B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. *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. 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. An investor owning which of the following variable annuity contracts would hold accumulation units? *Only variable annuities have payout plans that provide the client income for life. Variable annuity salespeople must register with all of the following EXCEPT: A) FINRA. This guideline has been prepared for use by Federal agencies. Chapter 4: Annuities Flashcards | Chegg.com are purchased primarily for their insurance features A)II and III Changes in payments on a variable annuity correspond most closely to fluctuations in the: They can be classified by: Nature of the underlying investment - fixed or variable Chapter 12: Variable Annuities Flashcards | Quizlet 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 A) I and III. The customer, in the accumulation stage of the annuity, is holding accumulation units. Solved Which of the following is characteristic of variable - Chegg B) Life annuity with period certain Question #17 of 48Question ID: 606802 Every annuity has some characteristics in common. D) Life annuity with 10-year period certain. Question #40 of 48Question ID: 606800 B) II and IV. Question #13 of 48Question ID: 606822 Question #14 of 48Question ID: 606823 can be sold by someone with only an insurance license Question #41 of 48Question ID: 606801 B) fixed payments for 10 years, followed by variable payments for life. Premiums made into the annuity purchase accumulation units. B)a majority vote from the shareholders is required to change the investment objectives. Question #20 of 48Question ID: 606808 Her agent recommended she choose a variable annuity as a safe haven for the funds. A deferred annuity is an insurance contract that promises to pay the buyer a regular stream of income, or a lump sum, at some date in the future. Reference: 12.1.2.1.1 in the License Exam. used for the investment of funds paid by contract holders. C)suitable due to the death benefit features of a variable annuity. Future annuity payments will vary according to the separate account's performance. *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. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. Distribution can take place before or during any solicitation for sale. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? regulated under both securities and insurance laws. D) I and II. 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. D) The investment risk is shared between the insurance company and the policyowner. C)Mortality risk. Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. Variable annuity salespeople must register with all of the following EXCEPT: Which of the following are defined as securities? The tax on this amount is $3,000. A) be paid to a designated beneficiary. A)defined contribution plans. Sub accounts and mutual funds are conceptually. Fixed annuities are not considered securities as return is guaranteed by the insurance company issuer. 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. D)with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed, 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. However, the web version (cat. John is the annuitant in a variable plan, and Sue is the beneficiary. In March, the actual net return to the separate account was 8%. D) I and III. If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. b. B. On any device & OS. Which is it? Distributions to the annuitant will fluctuate during the payout period. 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. C)I and IV. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 All of the following statements concerning a variable annuity are correct EXCEPT: B) prime rate. B) I and IV. Once a variable annuity has been annuitized: B) The death benefit cannot ever be more than the guaranteed benefit. B) The entire $10,000 is taxable as ordinary income. This includes transportation, food, lodging, and entertainment. A) Fixed Annuity An Immediate Annuity is designed to provide each of the following features, EXCEPT: The creation of an estate. There are also immediate annuities, which begin paying income right away. A) I and II C)II and IV. 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. Reference: 12.1.4.2 in the License Exam. This factor is used to establish the dollar amount of the first annuity payment. D) Capital gains tax on earnings exceeding basis. B) The policyowner. Variable annuities operate in similar ways to . Policyholders . D)an accounting measure used to determine payments to the owner of the variable annuity. D)suitable due to the relative safety of the investment. A registered representative recommends a variable annuity with an income rider to a client. Reference: 12.3.3 in the License Exam. Do homework Doing homework can help you learn and understand the material covered in class.