RMD
Tell me the 2 tax quals that do NOT have an RMD obligation
Roth IRA and Non-Qualified
Basis - the non-taxable portion
Earnings - the taxable portion
This is a feature on certain products that can help or hurt the owner if they take a WD over the FWA or fully surrender during their surrender schedule. This number can change every day
Market Value Adjustment (MVA)
A custodially owned policy is an IRA or NQ in which a financial firm manages the money for an owner, listed here as the annuitant
FALSE - Custodially owned policies are only IRA's!
What is the minimum required to annuitize?
$2,000
What tax qual(s) do we allow to take loans
TSA only
If a call comes in validated, what is the one question you do not have to ask?
Last 4 of SSN
Scenario: Owners son calls and says mom is confined to a nursing home and they need the money to pay for her care. She is still under a surrender schedule, what is something you could check to see if the owner has?
LTC waiver
When do owners have to take their RMD by each year?
December 31st
What is the default federal tax withholding for an IRA or a NQ?
10%
This refers to policies that earn split or dual interest rates.
Two-Tiered
If an owner is 45, no other qualifying events AND has a defaulted loan on their policy, they can take a FS to themselves and we will offset the loan balance from the total
FALSE - we will automatically offset the loan once they have an approved QE or once they turn age 59.5
What is the bene called on an annuitized policy?
What is minimum loan amount we will process in most cases?
$1,000
T/F - If I am adding an email to the policy - the owner will get a letter confirming the update we made
FALSE - they will get an email letting them know that the email was added to their MassMutual Ascend policy
Scenario: Trustee of a trust calls and needs to update their personal info - can you do that over the phone?
YES - but you cannot change the personal info for the TRUST itself over the phone
If it's an owners first year that an RMD is due, when do they have a grace period until?
April 1
What is a TPA's role?
To review and approve transaction requests for TSA's
This refers to a two-tired policy when there AV and SV earn the same rate, but had a charge taken when policy was issued causing the values to be different
Contingent Load
You will find every statement for the policy in PEGA
FALSE - not always, PEGA only holds 80
DAILY DOUBLE!!!
What tax form does an owner need to fill out to update FIT on an annuitized policy?
W4P
What is the max amount of loan debt an owner can have in any 12 month period?
$50K
T/F - I updated the owners address, I can go ahead and mail them a copy of their 1099
FALSE
Scenario: Owner calls and states that they are going through a divorce and wondering how we handle that. What would you tell them?
You would tell them to send us the divorce decree, mention it needs to specifically outline how the policy HERE is to be split, and once received, our legal department will review
How many charities can an IRA give to at one time?
5 at a time. If they want to give to more, they would need to fill out another form for 5 more!
What is MANDATORY tax withholding for a TSA distribution to the owner that is not for RMD, hardship or a systematic payment?
20%
TRIPLE PLAY!!!!!!
SCR applies to NQ policies that meet these 3 criteria...
Opened in the same year
Opened with the same company
Opened with the same ownership
You can update the address over the phone for a trust or a policy with a POA on file
On an annuitized NQ, what is the ratio of taxable vs non taxable called?
Exclusion Ratio
DAILY DOUBLE!!!
Tell me in your own words - what are the payment frequencies an owner can choose for repaying their loans, and any requirements
Monthly or quarterly. If the owner chooses monthly from the beginning, we require it to be set up as a PAC payment.
Where do you look if the bene(s) are not loaded into PEGA?
OnBase - the initial application. You would also want to scroll through to be sure updates weren't done between the app and when we began loading into PEGA (2017)
Scenario: Owner called and needs to update beneficiaries and their last name due to marriage. What do you tell them we need and what do you send them?
They can complete both requests using the contract info change form, for the name change we would need a copy of the marriage certificate to prove name change
If an RMD is due in the SAME YEAR that a policy is issued, can we trust our system calculation for what the RMD will be?
NO! We would need the owner to either:
Verbally tell us to use the premium amount to calculate the amount
Send us a stmt showing the prior 12/31 value to base it off of
Fill in the box on the form telling us the prior 12/31 value
What tax qual allows for ownership changes?
Non-qualified
The calculation we do to determine how much interest and how much basis we send for a partial 1035 exchange
Pro-Rata
T/F - you can see bank/EFT info for an inherited policy in PEGA
FALSE - ALWAYS have to go to LifePRO for that info
Explain in your own words what the Medicaid Life Expectancy option is
A way to begin the stream of payments while protecting their Medicaid benefits. In most cases the state must be the contingent payee. They need to initial that they have retained legal counsel regarding this option in order to chose it.
What is the max payback period for a loan that is NOT for a residential purchase?
5 years
Give me 2 examples of additional security questions you can ask if the owner doesn't have benes, doesn't know the agent or the issue date
EFT info
Amount of last WD
Employer (for TSA)
PREVIOUS address or phone (if we have previous ones on record)
Prior transferring company if there was one
DL # -if we have a copy of it in OnBase
TRIPLE PLAY!!!
Scenario: A third party rep calls and asks to add overnight info to a request. He called in time to add it, gave you the billing account number, now...what 3 things do we do?
Update setup sheet
Add a highlighted note to the request
Send an inquiry to clarification
T/F - my annuitized policy payment can cover all of my still active policies RMD obligations
FALSE!
DAILY DOUBLE!!!
Tell me in your own words how an indirect transfer works for IRA's
They have 60 days to put the money into another IRA to be off the hook for taxes.
This is between the owner and uncle Sam - we still send a 1099 - but when they file, they have to prove the indirect transfer took place.
Tell me in your own words, what is proportionality?
A calculation that must be done on two tiered policies to balance out the two different values. A WD against the SV will also impact the AV. Since the values are different dollar amounts, they will be reduced by the same %, but the dollar amount reduction will be different from each value.
T/F - Inherited NQ's have a 5 year force out
FALSE - This only happens when they fail to set the 72s payments up by the first anniversary of decedents death.
Our company makes it a practice to not accept ones that will fall under the 5 year rule, but there are some on the books....
Can a NQ that falls under SCR annuitize? What are the options for those situations
Partial Annuitization - they only annuitize ONE policy and can only choose LIFE or 10 YEARS payout.
or
They would have to annuitize all policies together
When might we use or need to look up a 12 month high?
When the owner is close to the 50K limit and is inquiring about a new loan.
or
When the TPA may call and ask for a 12 month high when seeing if they can approve a new loan
When updating or adding contact information, what MUST be done? If not, this will be an automatic fail on your call audit!
You must ask an additional security question
Scenario: Owner calls. She says her AV dropped and wants to know why. She is 59.5 and had a defaulted loan
When she turned 59.5 we can automatically offset that defaulted loan and take it directly from the owners AV