MetLife offers a comprehensive benefits program, including healthcare benefits, life insurance, retirement benefits, parental leave, legal plan services and paid time off. Of the answer choices given the best would be to reevaluate the recommendation based on the new information tendered by the client. D)II and IV. A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. An 18-year-old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. *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. Future annuity payments will vary according to the separate account's performance. D) I and IV. is required by the Securities Act of 1933. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract D)the state insurance department. Premiums made into the annuity purchase accumulation units. A) periodic payment immediate annuity. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan. Annuity death benefits are generally paid in a lump sum. D)I and III. Question #29 of 48Question ID: 606831 In addition, an element of risk must be present. B)I and III. *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. A)variable annuities may only be sold by registered representatives. A) II and IV. Question #33 of 48Question ID: 606832 He earned the Chartered Financial Consultant designation for advanced financial planning, the Chartered Life Underwriter designation for advanced insurance specialization, the Accredited Financial Counselor for Financial Counseling and both the Retirement Income Certified Professional, and Certified Retirement Counselor designations for advance retirement planning. 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. Reference: 12.2.1 in the License Exam. If you die before the payout phase, your beneficiaries may receive a. B) I and II. *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. B) contact the issuer of the clients existing VA contract to facilitate the clients surrender of the contract. The holder of a variable annuity receives the largest monthly payments under which of the following payout options? Which 2 of the 4 client profiles would a VA be LEAST suitable for? A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. 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. In the case of deferred annuities, this is often referred to as the accumulation phase. A) II and III. Random withdrawals do not guarantee how long the money will last because large withdrawals can deplete the funds before the annuitant dies. *Once a variable annuity is annuitized, the accumulation units are converted into a fixed number of annuity units. Based on the information given in the question, the VA recommendation would not be suitable. This compensation may impact how and where listings appear. The number of annuity units varies. D) II and III. Which of the following statements is not true about the characteristics of a trend? B)variable annuities are classified as insurance products. IBM Noida, Uttar Pradesh, India1 month agoBe among the first 25 applicantsSee who IBM has hired for this roleNo longer accepting applications. An accumulation unit in a variable annuity contract is: A)an accounting measure used to determine the contract owner's interest in the separate account. The most suitable option and one considered effective for married couples is a single joint and last survivor contract. B)Universal variable life policy. C)none of these. B)II and III. C) suitable regardless of funding sources D) I and II. D)0. A) Ordinary income tax on earnings exceeding basis. EEO IS THE LAW . D)I and II. In March, the actual net return to the separate account was 8%. B) accumulation units. Reference: 12.2.1 in the License Exam, Question #48 of 48Question ID: 606835 The payout compared to last month's payout. The value of a variable annuity is based on the performance of an underlying portfolio of sub accounts selected by the annuity owner. This cloud model is composed of five essential characteristics, three service models, and four deployment models. B) prime rate. D) The fact that periodic payments into the contract may increase or decrease. D)an accounting measure used to determine payments to the owner of the variable annuity. III. The accumulation unit's value is used to calculate the total value of the account. \hspace{10pt} State unemployment (employer only), 3.8%3.8\%3.8% *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. C)II and IV. The value of accumulation and annuity units varies with the investment performance of the separate account. C)A 10% penalty plus the payment of ordinary income tax on all of the funds withdrawn. Her intent was to use the funds for the down payment on a house after graduation. Contributions to a nonqualified variable annuity are not tax deductible. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. The value of the separate account is now $30,000. The time period depends on how often the income is to be paid. C)II and III. Question #35 of 48Question ID: 606810 guarantees payments for a certain period of time. Anthony Battle is a CERTIFIED FINANCIAL PLANNER professional. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes. A the safety of the principal invested B the yield is always higher than bond yields. The funds are not liquid due to the surrender fees, and there is also a 10% penalty on withdrawals before age 59-. D)suitable due to the relative safety of the investment. B) life income A) II and IV. If the data is normally distributed with standard deviation$198, find the percent of vacationers who spent less than $1,200 per day. Reference: 12.3.3 in the License Exam. D)II and III. This customer has no spouse or dependents, which negates the value of the death benefit. D)with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed, 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. The customer, in the accumulation stage of the annuity, is holding accumulation units. A) waiver of premium Of the total payroll for the last week of the year, $30,000\$30,000$30,000 is subject to unemployment compensation taxes. An accumulation unit in a variable annuity contract is: B) payments continue until the death of the primary owner. All of the following investment strategies offer either fully or partially tax-deductible contributions to individuals who meet eligibility requirements EXCEPT: Question #24 of 48Question ID: 606806 Registration with FINRA is de facto registration with the SEC; no registration is required by the state banking commission. C)with guaranteed minimum withdrawal benefits (GMWBs) the periodic payments can be monthly, quarterly or annually continues payments as long as one annuitant is alive. IBM is a global brand and has its presence in 170 countries and operates . The remainder of the premium is invested in the separate account. The payout compared to the initial payout upon annuitization. Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 A) I and II. Based only on these facts, the variable annuity recommendation is \hspace{10pt} Federal unemployment (employer only), 0.8%0.8\%0.8%. C)not suitable because a lifetime income rider is only for someone who is already retired A) I and IV. Typically, they allow one withdrawal each year during the accumulation phase. With variable annuities policyholders can choose from a number of investment opportunities. An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. A customer has a nonqualified variable annuity. A) The entire amount is taxed as ordinary income, because it is not life insurance. Surrender fees and penalties for early withdrawal. *Contributions to a nonqualified variable annuity are not tax deductible. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies. He wants to ensure that the client, in addition to meeting suitability requirements, is aware of certain variable annuity contract characteristics. Annual depreciation on the machine is$12,000, and the tax rate of the company is 25%. *Accumulation units represent units of ownership in a life insurance company's separate account when the contract is in the accumulation stage. 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. withdraw funds without any tax consequences. C)prime rate. The funds in an annuity are off-limits to creditors and other debt collectors. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. Investopedia requires writers to use primary sources to support their work. A) I and III. If an investor has a fixed-annuity contract with an insurance company, which of the following risks is assumed by the investor? Life income riders are best suited for those who anticipate a lengthy retirement and are generally not yet retired when making the VA purchase. IV. C)number of accumulation units. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract 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. *The minimum guaranteed death benefit is provided by that portion of the payment invested in the insurance company's general account. D) 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. C)complete all paper work to purchase the annuity contract and obtain the clients signature immediately. Fixed interest rates during the payout period The value of each accumulation unit varies: Daily Variable annuities have Variable interest rates and benefits All of the following statements are true regarding the interest rate guarantees of fixed annuities, EXCEPT: The amount of the purchase payments that go into the account may be less than you paid because fees were taken out of the purchase payments. \hspace{10pt} Social security, 6%6\%6% on first $100,000\$100,000$100,000 of employee annual earnings D)variable annuities. The value of the annuity units is fixed. Spartan Technology Services and Solutions Private Limited is a subsidiary of IBM (International Business Machines) Corporation. Determine whether the following events are independent or dependent. If in the following year, the S&P 500 declined by 5%, the annuities value would remain at $107,000 because gains are locked in each year. C) II and III. *The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. C)100% tax deferred. A) Fixed annuities. C) It will stay the same. The value of these units varies with the performance of the separate account. Variable annuity salespeople must be registered with FINRA and the state insurance department. The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A) Life-only annuity B) II and IV. Which of the following recommendations would best meet the customer profile? If the annuitant dies during the accumulation period, his/her beneficiary will receive the promised annuity payments. That can adversely affect your returns over the long term, compared with other types of investments. View full document. However, the web version (cat. For example, when paying rent, the rent payment (PMT) C) The investor's concerns about taxes. *Mortality risk- If an annuitant lives longer than expected, the insurance company will have to continue payments longer than expected. A 1 The applicant and possibly the agent initial any changes made. D) II and IV. 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 Fixed annuities. The beneficiary is taxed at ordinary income rates during the year the lump sum is received. D) an accounting measure used to determine the contract owner's interest in the separate account. How does an indexed annuity differ from a fixed annuity? a life insurance holder dies sooner than expected. As with all tax-deferred accounts, municipal bonds are not appropriate investments because interest earned on municipals is already tax exempt at the federal level. D) Joint and last survivor annuity. D) I and IV A)Purchasing power risk. C) II and IV. (Check all that apply.) D) I and II. vote for the investment adviser. B)Tax-free municipal bonds C)The entire $10,000 is taxable as ordinary income. C)Keogh plans. C)II and IV. The investor has already paid tax on the contributions but the earnings have grown tax-deferred. C)such an annuity is designed to combat inflation risk. D) Any time before the accumulation period. An annuity payment is the dollar amount of the equal periodic payment in an annuity environment. The payout of an annuitized variable annuity account changes from month to month in a manner determined by which of the following? B) I and IV. D) Variable annuities. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. Then find the probability of the event. B)I and III. Variable annuities provide protection from inflation because their monthly income can increase depending on the separate account's performance. When the annuitization option is selected, each payment represents both capital and earnings. B) 0. The number of variable annuity accumulation units can rise during the accumulation period when additional units are being purchased. When may a variable annuity account be surrendered? Once the cost basis is reached, any further withdrawals are a nontaxable return of principal. Upon John's death during the accumulation period, Sue takes a lump-sum payment. D) 100% tax deferred. Once a variable annuity has been annuitized: D) the number of annuity units becomes fixed when the contract is annuitized. 111. 10.1 This chapter addresses a number of ABS statistics relating to the economically active population which were not discussed elsewhere. A deferred annuity is an insurance contract that promises to pay the buyer a regular stream of income, or a lump sum, at some date in the future. B)I and III. A)the number of annuity units becomes fixed when the contract is annuitized. Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). If the owner of a variable annuity dies during the accumulation period, any death benefit will: She will receive the annuity's entire value in a lump-sum payment. 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. VAs, blue chip mutual fund portfolios, ETFs and ETNs are all tied to market performance in some way and have risk characteristics that would not align in terms of suitability for this client. A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic pay- ments to you, beginning either immediately or at some future date. B) During the accumulation period. *When a variable contract is annuitized (distributed in regular payments, not as a lump sum), the number of accumulation units is multiplied by the unit value to arrive at the account's current value. C. 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) the yield is always higher than mortgage yields. Variable annuities are designed to combat inflation risk. C) with guaranteed minimum withdrawal benefits (GMWBs) a lifetime of periodic payments is guaranteed B)Value of each annuity unit each month. D) value of accumulation units. 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. have investment risk that is assumed by the investor During the accumulation phase, you make purchase payments. What Are the Risks of Annuities in a Recession? The value of the annuity units varies. Try P=525p2+65,326p185,000E=326p+185,000P=-525 p^{2}+65,326 p-185,000 \quad E=-326 p+185,000P=525p2+65,326p185,000E=326p+185,000. Fixed income instruments, like bonds and fixed annuities, are subject to purchasing power risk. If an insurance holder dies sooner than expected, the insurance company will have to pay the death benefit sooner. For a retired person, which of the following investments would provide the greatest protection against inflation? This factor is used to establish the dollar amount of the first annuity payment. 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. *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. A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of sub accounts. A) 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. B) Corporate debt securities The tax on this is $2,800 ($10,000 x 28%). *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. Future annuity payments will vary according to the separate account's performance. D) It cannot be determined until the April return is calculated. It is the starting point of motivation because they generate emotions. They can be classified by: Nature of the underlying investment - fixed or variable Similarly, CDs are insured, thereby eliminating risk and guaranteeing a return. do not have a separate account B)I and II C) 10 years of variable payments. B) Life annuity with period certain Universal variable life policies What is her total tax liability? A)defined contribution plans. This includes transportation, food, lodging, and entertainment. A joint-and-last-survivor annuity is a payout option where: Question #42 of 48Question ID: 606830 C) Life annuity with period certain. Reference: 12.3.4 in the License Exam, Chapter 16: U.S. Government and State Rules a, Chapter 17: Other SEC and SRO Rules and Regul, Chapter 15: Ethics, Recommendations, and Taxa, Chapter 13: Direct Participation Programs, Fundamentals of Financial Management, Concise Edition, Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik, Carl Warren, James M Reeve, Jonathan E. Duchac. Life Insurance vs. Annuity: What's the Difference? What will this transaction provide? B) The entire $10,000 is taxable as ordinary income. A) number of annuity units. C) II and IV. national origin, genetics, disability, age, veteran status, or any other characteristic protected by law. The number of accumulation units can rise during the accumulation period. Round to the nearest hundredth of a percent. A) Dow Jones Industrial Average. Deal with mathematic Math is all about solving equations and finding the right answer. 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)Life annuity with period certain. How to Rollover a Variable Annuity Into an IRA. B) The proceeds minus John's cost basis taxed as ordinary income at Sue's tax rate. On any device & OS. For a nonqualified variable annuity, cost basis for the annuitant would use the after-tax dollars contributed. Because the client is older than age 59-, he does not pay 10% premature distribution penalty tax. 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. Fixed annuities are not considered securities as return is guaranteed by the insurance company issuer. A) each annuity unit's value is fixed, but the number of annuity units varies with time. C)It will be higher. The wage for applicants for this position is $45,979.00 per year. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. Changes in payments on a variable annuity correspond most closely to fluctuations in the: Reference: 12.1.2 in the License Exam, Question #39 of 48Question ID: 721469 B) A 30 year old construction worker recently unemployed who wants to invest his severance pay amounting to 9 months salary. Reference: 12.1.2.1.1 in the License Exam. D)I and III. Annuities due are a type of annuity where payments are made at the beginning of each payment period. A) complete all paper work to purchase the annuity contract and obtain the clients signature immediately. All of the following statements concerning a variable annuity are correct EXCEPT: B) Age 78, retired for 20 years, lives comfortably and wants to leave all liquid assets to children B) the safety of the principal invested. D)A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. A)IPO. It was a lump-sum purchase. Home; About. 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. Which of the following is NOT an accurate statement concerning a variable life insurance contract? A security is any investment for profit with management performed by a third party. 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. Fixed annuities pay a fixed monthly benefit which loses purchasing power if there is inflation. Reference: 12.3.3 in the License Exam. With a fixed annuity, by contrast, the insurance company assumes the risk of delivering whatever return it has promised. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. Expert Answer. A universal variable life policy should be purchased primarily for its insurance features, not its investment features. The work environment characteristics are normal office conditions. A)It will stay the same. If the client, who is in a 30% tax bracket, makes a random withdrawal of $15,000, what will the tax liability to the IRS be? D) None, because it is the proceeds from a life insurance company. Determine the revenue equation given the profit and expense equations. &&& \underline{\underline{\$341,718}} B)fixed in value until the holder retires. Variable annuity salespeople must register with all of the following EXCEPT: Because this is not guaranteed, the policyowner bears the investment risk. C)II and IV. B)I and III. Sample problems from Chapter 9. . Reference: 12.1.2.1.2 in the License Exam. The return on a variable annuity is not guaranteed; it is determined by the underlying portfolio's value. b. Once annuitized, the number of annuity units does not vary. B) I and III. A) A variable annuity Outgoing personality with the ability to develop relationships (i.e., "People Person") and a sincere desire to help others Fearless, positive attitude, and willingness to be accountable for results Organized, detail-oriented, and excellent time-management skills A desire for continuous learning Based on the clients profile which of the following would be the best recommendation? *The owner of a life annuity with 10-year period certain will receive payments for life, subject to a minimum of 10 years. A) I and II *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.
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