C)Life annuity. 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. Variable annuity salespeople must register with all of the following EXCEPT: Your answer, the state banking commission., was correct!. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. Is required by the Securities Act of 1933, 4. The following are all characteristics of variable annuities EXCEPT: [A]The investment portfolio contains insurance protections against losses. D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. C)100% tax deferred. A) Two-thirds of the withdrawal is taxable as ordinary income. To prevent this situation individuals can buy a guaranteed period with the immediate annuity. a life insurance holder dies sooner than expected. C)II and IV. Individuals are reducing their overall risk, because only part of the money is being put in each investment. 4. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. Reference: 12.3.3 in the License Exam. If one purchases an annuity for a set price, the issuing company would invest the funds and hold them until they are supposed to be disbursed, generally based on the owner's age. If this client is in the payout phase, how would his April payment compare to his March payment? B)Tax-free municipal bonds B)variable annuities are classified as insurance products. holder lives longer than expected, 4. a life ins. A separate account will invest in a number of different securities. [D]The portfolio may contain mutual fund shares. Because they have a separate account in which the investor assumes the investment risk, they can only be sold by individuals with both ins. a variable annuity does not guarantee an earnings rate of return. B)I and III. Insurance companies introduced the variable annuity as an opportunity to keep pace with inflation. holder dies sooner than expected. Question #45 of 48Question ID: 606795 Reference: 12.1.4 in the License Exam. The upside was the possibility of higher returns during the accumulation phase and a larger income during the payout phase. For an investor, which of the following is the most important factor in determining the suitability of a variable annuity investment? A)IPO. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. If he wants to purchase an annuity and start receiving payments now, what would you suggest? 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)Corporate debt securities Question #43 of 48Question ID: 606809 Please select the correct language below. Variable Annuities Flashcards | Quizlet Find out how you can intelligently organize your Flashcards. 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. Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but theres also a risk that the account will fall in value. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. D)separate account may consist of mutual funds. This factor is used to establish the dollar amount of the first annuity payment. A)II and IV. C)Corporate bonds.
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