The LATF-adopted ILVA Actuarial Guideline has an effective date of July 1, 2024 for contracts, riders or endorsements issued on or after that date. can be sold by someone with only an insurance license B) with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually You have 4 clients each expressing interest in a variable annuity contract. An accumulation unit in a variable annuity contract is: On withdrawals from a nonqualified annuity, taxes are paid only on the amount that exceeds cost basis (the amount paid into the annuity). Reference: 12.1.2.1.2 in the License Exam. A) I and II The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. During the accumulation phase, you make purchase payments. When a variable annuity contract is annuitized, the number of annuity units is fixed. *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. The most suitable option and one considered effective for married couples is a single joint and last survivor contract. D)0. Describe. C)Life annuity. *Universal variable life policies are insurance company products that should be purchased primarily for the insurance features they offer rather than as an investment. Question #29 of 48Question ID: 606831 Changes in payments on a variable annuity correspond most closely to fluctuations in the: A)variable annuities will protect an investor against capital loss. However, at the end of the period certain the payments to the named beneficiary (the spouse) will stop. There are also immediate annuities, which begin paying income right away. Your customer is interested in a variable annuity but is unclear on some of the details regarding different specifications and riders that can be attached to the contract. Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return. B) the rate of return is determined by the underlying portfolio's value. They are more suitable for individuals who can fund the annuity with cash, want to supplement existing retirement benefits they have already funded, are comfortable with the market risk associated with a VA separate account portfolio and anticipate a long retirement. MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. However, it does guarantee payments for life (mortality). *Accumulation units represent units of ownership in a life insurance company's separate account when the contract is in the accumulation stage. Diagnosis is made by punch biopsy. On any device & OS. Question #15 of 48Question ID: 606804 Underlying equity investments T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. Lifetime vs. fixed period annuities D) Joint and last survivor annuity. A registered representative recommends a variable annuity with an income rider to a client. D) minimum guaranteed death benefit. IV. a variable annuity does not guarantee an earnings rate of return. Variable Annuities. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. I. A) I and III. *Since this is a nonqualified annuity (with no tax deduction), the client pays taxes only on the growth portion or, in this case, $10,000. Which of the following statements regarding variable annuities are TRUE? This cloud model is composed of five essential characteristics, three service models, and four deployment models. C)III and IV. A variable annuity is a combination of 2 products: an insurance contract and a mutual fund. Question #14 of 48Question ID: 606823 Following the transition to T+1 in the U.S. markets, Commission staff will continue to work with industry leaders, public interest advocates, investors and other regulators to assess the future feasibility of a T+0 settlement standard cycle, and seek to identify ways to overcome the challenges associated with such a move, as articulated in the . If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. John is the annuitant in a variable plan, and Sue is the beneficiary. Reference: 12.3.1 in the License Exam. If this client is in the payout phase, how would his April payment compare to his March payment? C) II and IV. A 3 "Variable Annuities: What You Should Know," Pages 67. D) I and III. 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. The investor has already paid tax on the contributions but the earnings have grown tax-deferred. D)an accounting measure used to determine payments to the owner of the variable annuity. B)II and III. & \underline{\underline{\$1,014,000}} & \hspace{10pt} \text{U.S. savings bonds} & 30,420\\ Given that all of the current retirement investments are subject to market risk, the customer wants these new funds to have no market risk exposure. *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. Immediate annuities purchase annuity units directly. 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. A) I and II. national origin, genetics, disability, age, veteran status, or any other characteristic protected by law. 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. a variable annuity guarantees an earnings rate of return. D) variable annuities may only be sold by registered representatives. II. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? Science Health Science Nursing. Distributions to the annuitant will fluctuate during the payout period. Reference: 12.3.3 in the License Exam. Options. B) The investor's marital status. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . A)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. C)III and IV. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. The value of the annuity units varies. C)Growth mutual funds The investor has already paid tax on the contributions but the earnings have grown tax-deferred. D)the rate of return is determined by the underlying portfolio's value. View full document. B) value of annuity units. Reference: 12.1.4.1 in the License Exam. In a variable life annuity with 10-year period certain, a contract holder receives: C) 3800. As part of his profile he stresses that he has had uncomfortable experiences in the past with the stock market and is not inclined to invest in anything that is based on stock market performance and would opt for principal protection instead. A) Fixed Annuity Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. When the contract is annuitized, the annuitant is credited with a fixed number of annuity units. A variable annuity is a long term investment issued by an insurance company that can help you grow your money, take income in retirement and pass on your wealth. 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. C) the client assumes the investment risk. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually In March, the actual net return to the separate account was 8%. A) The fact that the annuity payment may increase or decrease. Question #25 of 48Question ID: 606819 The holder of a variable annuity receives the largest monthly payments under which of the following payout options? A) the investment portfolio is managed professionally. A)number of annuity units. If the owner of a variable annuity dies during the accumulation period, any death benefit will: They can be classified by: Nature of the underlying investment - fixed or variable C) The portion of the premium invested in the insurance company's general account is used to provide for the minimum guaranteed amount of the death benefit. B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. 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 How Good of a Deal Is an Indexed Annuity? It's somewhat similar to a variable life insurance policy in that: You can choose how the product's value is invested. 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. No paper. Your customer in his early 30s has received a modest inheritance from a relative. Fixed annuities, on the other hand, provide a guaranteed return. Clusters of vesicles in various stages. Reference: 12.2.1 in the License Exam. III) A hierarchy of corporate staff evaluates divisions' plans and performance. *Of the four customer profiles the individual already making the maximum retirement account contributions available to him and wanting to minimize the tax consequences of being in a high income tax bracket would be most suitable for a VA recommendation. are purchased primarily for their insurance features 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. *BEST Suited for VA-Age 56, available cash to invest, maxes out IRA and 401(k) plan VA will be supplemental income, would not be suitable for cust. A) The policy provides a minimum guaranteed death benefit. Prudential's businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, asset management, and real estate services. A)accumulation shares. But again, the need to designate beneficiaries is not an issue for this annuitant. B) I and IV. An annuity is an agreement for one person or organization to pay another a series of payments. A) waiver of premium D) The fact that periodic payments into the contract may increase or decrease. As part of the registration requirements, a prospectus must be filed and distributed to prospective investors. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed B) IPO. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. As of March 03, 2023, had a relative dividend yield of % compared to the industry median of %. That can adversely affect your returns over the long term, compared with other types of investments. The entire amount is taxed as ordinary income. B) taxed as ordinary income. Fixed Annuity, Retirement Annuities: Know the Pros and Cons. However, the web version (cat. B)Variable annuities. Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. D) Life annuity with 10-year period certain. *Contributions to a nonqualified variable annuity are not tax deductible. A) Ordinary income tax on earnings exceeding basis. All of the following statements about variable annuities are true EXCEPT: A) II and IV. As the name implies, the investment performance of a variable annuity's portfolio (separate account) can vary, and the investor bears the risk of any potential decline in its value.
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