What do you call the contract between an insurance company and an individual, generally guaranteeing lifetime income to the individual(s) whose life the contract is based on.
Annuity
100
One of the benefit of an Annuity that means -Money accumulated in an annuity are not taxed until withdrawn
Tax Deferred / Tax Deferral
100
One of the benefit of an annuity - A provision of an annuity contract that allows for a payment to a named beneficiary at death. Generally the contributions made to the annuity or the accumulate contract value, whichever is greater.
Death Benefit
100
Another benefit of an Annuity - There is no charge for trading investment options with an annuity.
Free Trades
200
Phase of an Annuity where Additional Payments may be made
Accumulation Phase
200
Who bears the risk in a Fixed annuity contract?
Insurance company
200
Phase of an Annuity - Insurance Company has control over the annuity
Annuitization Phase
200
Who bears the risk in a Variable annuity?
Owner
300
Type of an Annuity - Insurance contract purchased for a single premium starts to pay the annuitant immediately following its purchase.
Immediate Annuity
300
The money within this line of business has NEVER been taxed and so the money will be 100% taxable once withdrawn
Qualified Lines of Business
300
Contributions for this Line of Business are made from “post tax” money.
Non Qualified LOB's
300
What do you call the amount of all monies with in a non-qualified contract that have already been taxed
Tax Cost Basis / TCB / Cost Basis
400
Type of TCB - wherein cost basis is removed after earnings are removed from the contract. This is commonly known as the last in, first out method (LIFO)
Post Tefra
400
Tax form used to report distributions from an annuity to the IRS and are issued every January
1099r Form
400
Tax form used to report contributions from an annuity to the IRS and are issued every May
5498 tax form
400
Fee Level : fees taken from the contract are reflected in the client’s statements.
Contract Level Fees
500
What is Mortality and Expense fee (M&E)?
This is the fee for Death Benefit and Annuitization
500
What do you mean by CDSC (Contingent Deferred Sales Charge)
This is the lenght of time that the client should keep their contract within the company to avoid surrender charges.
500
What is 10% Early withdrawal Penalty?
This is an IRS requirement taxes when an owner withdrawks before the age 59 1/2
500
Differentiate Fixed and Variable Annuity
Fixed annuities oferred a fixed minimum rate for the life of the contract, while the variable annuity are invested in the market so the account performance really depends on the market.