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A) 2800. PGIM Fixed Income, a division of PGIM Inc., an SEC-registered investment adviser and a business unit of Prudential Financial, Inc. is seeking a Portfolio Risk Surveillance Analyst. This includes transportation, food, lodging, and entertainment. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero B)each annuity unit's value varies with time, but the number of annuity units is fixed. Expert Answer. 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. An individual who purchases a Life annuity is given protection against: the risk of living longer than expected The type of annuity that can be purchased with one monetary deposit is called a (n) Immediate annuity N purchases an annuity by making payments in an amount no less than $100 quarterly. U.S. Securities and Exchange Commission. *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. This compensation may impact how and where listings appear. An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is: B)I and II Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 Classifying annuities There are many categories of annuities. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. D) I and II. D)the rate of return is determined by the underlying portfolio's value. A) A variable annuity Essential Characteristics: This guideline has been prepared for use by Federal agencies. the SEC. &&& \underline{\underline{\$341,718}} Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 All of the following are characteristics of Variable Annuity contracts EXCEPT The possibility of higher returns and greater income than fixed annuities, but there's also a risk that the account will fall in value A There are no surrender fees B Guaranteed death benefit C Tax deferred growth D Training Explanations continues payments as long as one annuitant is alive. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). What are the different types of annuities? | III A) II and III. D) Life annuity with 10-year period certain. The growth portion is taxed as ordinary income. The investor purchased accumulation units. \hspace{7pt} b. December 303030, to record the employers payroll taxes on the payroll to be paid on December 313131. D) accumulation shares. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. B)I and IV. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. Variable annuity Which of the following is characteristic of fixed annuities? D)value of accumulation units. Table1. Portfolio Compliance Risk Analyst Job in Newark, NJ at Prudential If at all you go deeper, then you will find a wide range of annuity products from a variety of companies. In deciding whether to put money into a variable annuity versus some other type of investment, its worth weighing these pros and cons. "Variable Annuities: What You Should Know," Pages 67. For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. Try A) I and III. B)Variable annuities. The work environment characteristics are normal office conditions. D) I and IV. B)Tax-free municipal bonds Variable annuities operate in similar ways to . C)I and IV. There is a guaranteed minimum interest rate, normally amounting to between 1 and 3 percent. The offers that appear in this table are from partnerships from which Investopedia receives compensation. No paper. A)the yield is always higher than mortgage yields. B) Life annuity with period certain C)earnings only and taxable A) a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero B) The death benefit cannot ever be more than the guaranteed benefit. How Variable Life Insurance Works: Pros and Cons - ValuePenguin Reference: 12.2.1 in the License Exam. a variable annuity does not guarantee payments for life. Reference: 12.1.2 in the License Exam. D) expense guarantee. An annuitant assumes the investment risk of a variable annuity and is not protected byt he insurance company from capital losses. Typically, they allow one withdrawal each year during the accumulation phase. In a joint-and-last-survivor option, the annuity payment is made jointly to both parties while both are alive. && \hspace{10pt}\text{Group insurance} & \underline{45,630}\\ Solved Which of the following is characteristic of variable - Chegg Therefore, ordinary income taxes will apply to the entire $10,000. 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. Do homework Doing homework can help you learn and understand the material covered in class. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. All of the following statements about variable annuities are true EXCEPT: D) 4500. If the customer takes a withdrawal of $10,000, what are the tax consequences? Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. Annuity death benefits are generally paid in a lump sum. . A joint-and-last-survivor annuity is a payout option where: Because they have a separate account in which the investor assumes the investment risk, they can only be sold by individuals with both insurance and securities licenses. \hspace{7pt} b. January 444, to record the employers payroll taxes on the payroll to be paid on January 444. The value of accumulation and annuity units varies with the investment performance of the separate account. A) the investment portfolio is managed professionally. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? MetLife, Inc. Senior Customer Care Advocate Annuities ($22 per hour Life with period certain will produce a smaller check for life because the insurance company will guarantee payments to a beneficiary for a certain period of time designated in the contract should the annuitant die within that period. All of the following characteristics are shared by both a mutual fund and a variable annuity's separate account EXCEPT: Licensed to sell Variable Annuities in the following state(s): FL, TX . B) prime rate. A)II and III Get the free Learn About Annuities and Their Myths - F&G The tax on this is $2,800 ($10,000 x 28%). A) I and III. Reference: 12.3.3 in the License Exam. No software installation. If your client, who is in the 28% tax bracket, makes a lump-sum withdrawal of $15,000, what tax liability results from the withdrawal? 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. A)Fixed annuities. Financial Sales Professional Job in Fort Worth, TX at New York Life Variable annuity salespeople must be registered with FINRA and the state insurance department. C) III and IV. approve changes in the plan portfolio. Immediate life annuity with 10-year period certain. Annuities: How to Find the Right One for You, How a Fixed Annuity Works After Retirement, Pros and Cons of Indexed Universal Life Insurance. Which Earns More: Variable or Fixed Annuities? PDF Prudential IncomeFlex Target Vanguard Balanced Index Fund B)Universal variable life policy. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. A) The fact that the annuity payment may increase or decrease. The separate account is used for both variable life insurance and variable annuity investments. II. C)Life annuity. D) be paid to the issuing company to complete the plan. Variable annuities must be registered with: D)It cannot be determined until the April return is calculated. B) 10% penalty plus payment of ordinary income tax on all funds withdrawn. 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)II and IV. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. John is the annuitant in a variable plan, and Sue is the beneficiary. A) taxed at a reduced rate. 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. Only variable annuities have payout plans that provide the client income for life. All of the following are characteristics of a variable annuity, except C)the yield is always higher than bond yields. D) each annuity unit's value varies with time, but the number of annuity units is fixed. B)100% taxable. D) There is no guarantee regarding the investment results of the separate account. 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 trend makes considerable influence or impact. \end{array} a variable annuity guarantees an earnings rate of return. *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. C) be returned to the separate account. Future annuity payments will vary according to the separate account's performance. A) variable annuities offer the investor protection against capital loss. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? How is the distribution taxed? The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. regulated under both securities and insurance laws. B) I and II. Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. C)the invested money will be professionally managed according to the issuers' investment objectives. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. B) I and III. Her intent was to use the funds for the down payment on a house after graduation. D)variable annuities offer the investor protection against capital loss. All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. variable An immediate annuity consists of a Single Premium T has an annuity that guarantees an income payment for the rest of his life. 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. B)part earnings and part cost basis If your customer invests in a variable annuity and chooses to annuitize at age 65, which of the following statements are TRUE? Once the contract is annuitized, monthly payments to the customer are: Which of the following is NOT associated with characteristics of shares That can adversely affect your returns over the long term, compared with other types of investments. Withdrawals from a nonqualified variable annuity are made on a LIFO basis, so the taxable earnings are considered taken out before principal. When the first party dies, the annuity payment is made to the survivor. 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. What Are the Biggest Disadvantages of Annuities? I. D) reevaluate whether the recommendation for the VA contract is still suitable based on the clients proposed funding of the investment. A) two people are covered and payments continue until the second death. C) II and IV. B) variable annuities. A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as B) II and III. B) It will be lower. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. The number of accumulation units can rise during the accumulation period. B)a minimum rate of return is guaranteed. Question #28 of 48Question ID: 606821 D) II and III. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? This would not align with the couple's criteria for coverage as long as they both live. Transcribed image text: 6. e) Are From the United States and Log on every day independently? vote for the investment adviser. D) Variable annuity. C) single payment immediate annuity. C)Corporate bonds. During the accumulation phase, the number of accumulation units will increase as additional money is invested. When the second party dies, all payments cease. The value of an annuity unit varies from month to month according to the performance of the separate account in comparison to the assumed interest rate. Complete a blank sample electronically to save yourself time and money. Which of the following statements regarding variable annuities are TRUE? D) Keogh plans. She will receive the annuity's entire value in a lump-sum payment. A) III and IV. With variable annuities policyholders can choose from a number of investment opportunities. A)II and IV. If this client is in the payout phase, how would his April payment compare to his March payment? B) I and III. D) Capital gains tax on earnings exceeding basis. A customer has an investment objective of keeping pace with inflation while assuming moderate risk. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. 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. During payout, distributions will fluctuate due to performance in the separate account. An investor who purchases a fixed annuity contract assumes purchasing-power risk. EEO IS THE LAW . Since the client is older than 59 at the time of distribution, the additional 10% penalty tax is not incurred. For example, if the income is monthly, the first payment comes one month after the immediate annuity is bought. IV. Do whatever you want with a Learn About Annuities and Their Myths - F&G: fill, sign, print and send online instantly. # 7 Annuities Flashcards | Quizlet Question #47 of 48Question ID: 606813 There are two interest rates under fixed annuities. Simple and general annuities problems with solutions Which of the following is characteristic of variable annuities? Question #12 of 48Question ID: 606814 Every annuity has some characteristics in common. *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. The value of the customer's account is converted into annuity units if and when the customer decides to annuitize the contract. B) II and IV. D) payments continue until age 70-. do not have a separate account Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 Question #42 of 48Question ID: 606830 A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. C) I and III. Reference: 12.1.4.1 in the License Exam. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. Reference: 12.2.1 in the License Exam. All of the following are accurate statements to make to the client EXCEPT C) III and IV. D) Variable Annuity. Reference: 12.3.3 in the License Exam. Annuities | FINRA.org The separate account performance compared to an assumed interest rate. II. Question #35 of 48Question ID: 606810 Accumulation Period of Fixed Annuities During this period, premiums are credited with interest which accumulates on a yearly basis. C) III and IV. A Variable Annuity Has Which of the Following Characteristics *VAs are less suitable for individuals who have not yet made maximum contributions to other retirement accounts such as IRAs and 401ks. In a variable annuity contract, the provision that guarantees the annuitant payments for life is called the: If the annuitant should die during that time, any death benefit would be paid to a beneficiary designated by the annuitant at the time the annuity was purchased. A) II and IV. \hspace{10pt} Federal unemployment (employer only), 0.8%0.8\%0.8%. C) The investor's concerns about taxes. Question #36 of 48Question ID: 606805 Variable annuities are riskier than fixed annuities because the underlying investments may lose value. Question #45 of 48Question ID: 606795 *Variable annuity contracts were devised to help investors keep pace with inflation. C) insurance guarantee. 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 . order now. Explain what is meant by positive and negative B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. Reference: 12.2.1 in the License Exam. Annuities basics | III B) The policyowner. C)I and III. C) I and IV. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? The number of accumulation units is always fixed throughout the accumulation period. a life insurance holder dies sooner than expected. D)suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract, Based on the information given in the question, the VA recommendation would not be suitable. A)a lifetime withdrawal benefit (LWB) or lifetime income benefit is generally in the form of a rider attached to the contract which will come at a cost to the annuitant