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D)the rate of return is determined by the underlying portfolio's value. Your 65-year-old client owns a nonqualified variable annuity. 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. Variable annuities grow tax-deferred, so you dont have to pay taxes on any investment gains until you begin receiving income or make a withdrawal. Investopedia requires writers to use primary sources to support their work. *Distributions from a nonqualified plan represent both a return of the original investment made in the plan with after-tax dollars (a nontaxable return of capital) and the income from that investment. D) a minimum of 10 years of variable payments, followed by additional variable payments for life. C) Tax-free municipal bonds must be filed with FINRA. B) 0. B) IPO. C)It will be higher. This describes which of the following annuities? Reference: 12.3.3 in the License Exam. On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. Reference: 12.3.2.1 in the License Exam. \hspace{10pt} State unemployment (employer only), 3.8%3.8\%3.8% Which of the following is characteristic of variable annuities? B)fixed in value until the holder retires. All of the following statements regarding variable annuities are true EXCEPT: A) III and IV. D) an accounting measure used to determine the contract owner's interest in the separate account. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. How to Rollover a Variable Annuity Into an IRA. III. A) Age 56, available cash to invest, makes the maximum retirement plan contributions to an existing IRA and 401(k) plan Reference: 12.1.2.1.2 in the License Exam. *Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. Question #31 of 48Question ID: 606836 b. a variable annuity guarantees an earnings rate of return. Annuities are complicated products, so that may be easier said than done. Owners of variable annuities, like owners of mutual fund shares, may vote on changes in investment policy and for an investment adviser. Which of the following is not characteristic of a fixed annuity? B)part earnings and part cost basis This role is also eligible for annual short-term incentive compensation. Your client has $50,000 to invest. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. Trends Networks and Critical Thinking Module 2 The value of the separate account is now $30,000. The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. C)3800. C) a variable annuity contract does not guarantee any type of return Her agent recommended she choose a variable annuity as a safe haven for the funds. 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. D)Any tax due is deferred. B)FINRA. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. I. Reference: 12.1.2 in the License Exam. D) II and III. covers more than one person. 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. must be filed with FINRA. D)accumulation units. a. Variable annuity salespeople must register with all of the following EXCEPT: Which of the following are defined as securities? A) not suitable Needs - are goal-directed forces that people experience. In the case of deferred annuities, this is often referred to as the accumulation phase. Instructions\textsf{\textcolor{#4257b2}{Instructions}}Instructions If you die before the payout phase, your beneficiaries may receive a. D) I and IV. A)Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. There are also immediate annuities, which begin paying income right away. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. B) Life annuity. D)the state insurance department. If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. An investor who has purchased a nonqualified variable annuity has the right to: PDF The NIST definition of cloud computing the agent must be licensed in both insurance and securities. C)insurance companies keep variable annuity funds in separate accounts from other insurance products. 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 . Every annuity has some characteristics in common. PDF Prudential IncomeFlex Target Vanguard Balanced Index Fund Reference: 12.1.4 in the License Exam. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. 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. D) Variable annuities. D) 4200. A variable annuity's separate account is: A) used for the investment of monies paid by variable annuity contract holders B) separate from the insurance company's general investments C) operated in a manner similar to an investment company D) as much a security as it is an insurance product All of the above D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. 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. B) I and IV. A variable annuity is just a tax-deferred annuity in which you get to choose how the value of the annuity is invested. IBM is a global brand and has its presence in 170 countries and operates . D)Variable annuity. C) II and III. Word bank:Fixed, Variable Fixedannuities provide a guaranteed rate of return, whereas Variableannuities provide conservative to aggressive investments whose rates of return are not guaranteed. All of the following are characteristics of a variable annuity, except: a. A)the yield is always higher than mortgage yields. C)Growth mutual funds C) 100% tax free. A 58-year-old individual near retirement who is in good health and anticipates a lengthy retirement Future annuity payments will vary according to the separate account's performance. have investment risk that is assumed by the investor Contributions to a nonqualified variable annuity are not tax deductible. A) a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero B) be paid to any legal heirs as recognized by the annuitant's state of domicile. Question #46 of 48Question ID: 606796 A. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. The number of accumulation units is always fixed throughout the accumulation period. II. Variable annuities are designed to combat inflation risk. Variable annuities must be registered with: "Variable Annuities: What You Should Know," Page 3. D)Dow Jones Industrial Average. For example, when paying rent, the rent payment (PMT) What percentile is represented by $710? Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). About Us Annuities basics | III Upon John's death during the accumulation period, Sue takes a lump-sum payment. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. A) Money market fund. For example, when paying rent, the rent payment (PMT) . B)Variable annuities. b) What probability is the 20%20 \%20% mentioned above? A) The entire amount is taxed as ordinary income, because it is not life insurance. A) It will be higher. Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. Fixed Annuity, Retirement Annuities: Know the Pros and Cons. A)not suitable A) taxed at a reduced rate. Herpes Zoster has all of the following characteristics except: Group of answer choices. You have 4 clients each expressing interest in a variable annuity contract. 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. Variable annuities gave buyers a chance to benefit from rising markets by investing in a menu of mutual funds offered by the insurer. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. D) expense guarantee. D) I and II. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. A) partially a tax-free return of capital and partially taxable. A) Fixed Annuity C)II and IV. All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: A Variable Annuity Has Which of the Following Characteristics D) It cannot be determined until the April return is calculated. D)money market funds. D) II and IV. A variable annuity's separate account is: the SEC. Variable Annuities. The most popular type of variable annuity is a deferred annuity. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. B) The death benefit cannot ever be more than the guaranteed benefit. Universal variable life policies B)It will be lower. Suppose that 20%20 \%20% of their users are United States users who log on daily. A)equity funds. Reference: 12.1.1 in the License Exam. A)II and IV. is required by the Securities Act of 1933. FINRA. B)changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. A client has purchased a nonqualified variable annuity from a commercial insurance company. A) Fixed Annuity C) suggest to the client that perhaps a loan or refinancing his vacation home might be a better way to fund the contract purchase. C) A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. Based on this information the RR should: Uses in Investing, Pros, and Cons, Indexed Annuity: Definition, How It Works, Yields, and Caps. A) I and II. order now. D)II and III. 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. A customer has a nonqualified variable annuity. \hspace{7pt} a. December 303030, to record the payroll. Fixed annuities, on the other hand, provide a guaranteed return. A 10% penalty applies only if distributions begin before age 59-. A) A variable annuity D)Joint and last survivor annuity. 11.1: Fundamentals of Annuities - Mathematics LibreTexts A) 2800. 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. What are the characteristics of annuity? - Wise-Answers The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. Simple and general annuities problems with solutions 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. 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. Question #25 of 48Question ID: 606819 A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. The client agrees to purchase the contract and informs the RR that he will be cashing out a VA he purchased 2 years ago to fund the new contract and will forward the check as soon as he receives it. D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis.