Camp Lohikan Bullying Incident, Articles A

If the customer takes a withdrawal of $10,000, what are the tax consequences? B) the client may vote for the board of directors or board of managers. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. B)value of annuity units. Reference: 12.1.2 in the License Exam, Question #23 of 48Question ID: 901858 Here is how guaranteed lifetime annuities work. A passion for serving customers and a personal commitment to following through in a dynamic, fast-paced environment. The downside was that the buyer was exposed to market risk, which could result in losses. C)Keogh plans. a) What percentage of Facebook's users are from the United States? must precede every sales presentation. 6102..55.001) is being updated on an ongoing basis. The growth portion is taxed as ordinary income. 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. D)II and III. Any withdrawals you make prior to the age of 59 may also be subject to a 10% tax penalty. The customer, in the accumulation stage of the annuity, is holding accumulation units. What percentile is represented by $710? A 45-year-old employed individual with no other retirement accounts in place 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. A customer has a nonqualified variable annuity. D)the safety of the principal invested. Drives - are hardwired characteristics of the brain that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals. Essential Characteristics: A)the yield is always higher than mortgage yields. He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. B) IPO. In March, the actual net return to the separate account was 8%. C)II and IV. *The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. Which is it? 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. Variable Annuities Flashcards - Cram.com C)municipal bonds. A)100% tax free. The owner of a variable annuity has all of the following rights EXCEPT the right to vote: a. for the Board of Trustees b. to change the separate account's investment objective c. for distributing income and capital gains d. for dissolutions of the trust for distributing income and capital gains. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. 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. When a variable annuity contract is annuitized, the number of annuity units is fixed. C)III and IV. ($5,000) to a stock fund. 's dividend yield was % last year. B) the rate of return is determined by the underlying portfolio's value. A)Fixed annuity contract with a discussion regarding purchasing power risk She may choose to receive monthly payments for the rest of her life. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. C)II and IV. The number of annuity units rises once annuitization begins. Your customer in his early 30s has received a modest inheritance from a relative. A)accumulation shares. the agent must be licensed in both insurance and securities. An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. 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. 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. He originally invested $29,000 4 years ago; it now has a value of $39,000. Question #46 of 48Question ID: 606796 A) Ordinary income tax on earnings exceeding basis. They can be classified by: Nature of the underlying investment - fixed or variable Variable annuities operate in similar ways to . D)II and III. The funds are not liquid due to the surrender fees, and there is also a 10% penalty on withdrawals before age 59-. *The accumulation period of a variable annuity may continue for many years. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. IBM Noida, Uttar Pradesh, India4 weeks agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. The upside was the possibility of higher returns during the accumulation phase and a larger income during the payout phase. Based only on these facts, the variable annuity recommendation is D) Joint and last survivor annuity. A) not suitable Among annuities, variable annuities differ from fixed annuities, which provide a specific and guaranteed return. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. A) 4000. Sub accounts and mutual funds are conceptually identical, but sub accounts don't have ticker symbols that investors can easily type into a fund tracker for research purposes. B) It will be lower. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. B) During the accumulation period. When the second party dies, all payments cease. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A registered representative recommends a variable annuity with an income rider to a client. C)not suitable because a lifetime income rider is only for someone who is already retired a. Variable annuities are designed to combat inflation risk. a variable annuity has which of the following characteristics D)an accounting measure used to determine payments to the owner of the variable annuity. I. Fixed annuities pay a fixed monthly benefit which loses purchasing power if there is inflation. Distributions from such an annuity are computed on a LIFO basis with the income taxed first. The remainder of the premium is invested in the separate account. C)the SEC. The value of the annuity units is fixed. A 60-year-old individual, nearing retirement who has both IRAs and a 401k in place, is comfortable with market risk associated with the stock market, and has a lump sum in cash available to fund the annuity The features of variable deferred annuities are many. 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. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. D) a variable annuity contract is subject to fluctuating values due to market fluctuations of the underlying separate accounts. C) a variable annuity contract does not guarantee any type of return B) 0. Home; About. \hspace{10pt} State unemployment (employer only), 3.8%3.8\%3.8% All of the following statements concerning a variable annuity are correct EXCEPT: C) payments continue for a pre-determined period of time. Variable annuities should be considered long-term investments due to the limitations on withdrawals. Find the per-day expense for one of these travelers who had a z-score of -1.6. c. A Bargain Times Vacation Blog writer claimed to have done this vacation for a cost of$710 per person. C)I and IV. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. D) Variable Annuity. The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. Question #29 of 48Question ID: 606831 An individual retirement annuity is an investment vehiclesimilar to an individual retirement accountthat is offered by insurance companies. Variable annuity Which of the following is characteristic of fixed annuities? III. Reference: 12.1.2 in the License Exam. *Variable annuities offer tax-deferred growth and are suitable for achieving supplemental retirement income. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. a variable annuity guarantees payments for life. D)II and III. A) Life-only annuity Clusters of vesicles in various stages. Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return. B)Two-thirds of the withdrawal is taxable as ordinary income. B) 0. C)suitable due to the death benefit features of a variable annuity. Reference: 12.1.4.1 in the License Exam. Once the contract is annuitized, monthly payments to the customer are: Ideally they should be funded with readily available cash rather than using funds liquidated from existing investments. 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. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? The number of annuity units becomes fixed when the contract is annuitized; it is the value of each unit that fluctuates. If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? D) 4500. An annuitant assumes the investment risk of a variable annuity and is not protected byt he insurance company from capital losses. B) II and IV. The growth portion is subject to a 10% penalty. C) the yield is always higher than bond yields. How is the distribution taxed? Changes in payments on a variable annuity correspond most closely to fluctuations in the: Sample problems from Chapter 9. . B) allow customers to opt out of sharing of financial information with certain nonaffiliated firms. Policyholders . *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) the number of annuity units becomes fixed when the contract is annuitized. 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 time period depends on how often the income is to be paid. In a variable life annuity with 10-year period certain, a contract holder receives: C) I and III. B) Life annuity. A)not suitable Over the past five years, 's dividend yield has averaged % per year. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. The annuitized payments are viewed for tax purposes as Income that cannot be outlived by the owner *Contributions to a nonqualified variable annuity are not tax deductible. D) not suitable because a lifetime income rider is only for someone who is already retired. A) A 75 year old women, who is a former executive retired for over ten years who wants to preserve as much capital as she can to leave to her two grandchildren. When money is deposited into the annuity, it is purchasing accumulation units. It is innate and universal. *During the payout period, payments are based on a fixed number of annuity units established when the contract was annuitized. Therefore, ordinary income taxes will apply to the entire $10,000. How to Navigate Market Volatility While Saving for Retirement, Variable Annuity: Definition and How It Works, Vs. an annuitant dies sooner than expected. 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. 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. D) value of accumulation units.