Annuity Benefits
The money in a fixed deferred annuity grows at a guaranteed minimum interest rate.That means your account value will never go down unless you choose to make withdrawals.
What is 'Safe from market fluctuations?'
A contract between you and an insurance company in which you make a lump sum payment or series of payments and in return obtain regular disbursements beginning either immediately or at some point in the future.
What is an 'Annuity?'
What is the min and max premium for a 1 year balance annuity interest rate guarantee
Wat is '$10,000 and $1,000,000'
Ordinary annuity with a periodic payment of $1000 with an annual interest rate at 5% with a payment paid annually for 8 years find the future value of the annuity?
What is '$9,549.'
Fixed deferred annuities give you the choice to receive guaranteed payments for the rest of your life. This predictable income stream can help you plan for the goals you want to achieve during retirement.
What is 'The opportunity to generate a stream of income for life?'
To provide a steady stream of income during retirement
What is the 'Goal?'
Guarantee base rate for freedom series builder annuity?
What is '2.45%'
Which of the following statements is incorrect with respect to taxation of annuities:
a) No loss or gain shall be recognized when one annuity is exchanged for another under IRC section 1035
b) You can't deduct contributions to a non-qualified deferred annuity from current income
c) Investment gains are taxed at the regular capital gains rate rather than the marginal income tax rate
What is 'c) Investment gains inside an annuity do not receive favorable capital gains rate tax treatment.'
An investor hears the pros and cons of an indexed annuity and decides, on his own, to sell some mutual funds to get the cash and buy the annuity. Does the annuity producer need to be securities registered?
a) Yes
b) No
What is 'b) No - unless the producer provided the investor with a specific recommendation to sell the mutual funds to purchase the annuity.'
The money in your annuity accumulates on a tax-deferred basis. That means you do not pay taxes on your earnings until you withdraw the money. Because of tax deferral, your money may grow faster in an annuity than it might in a similar, taxable investment.
What is 'Tax-deferred growth?'
You contribute lump sum to the annuity account and immediately begin receiving regular payments, which can be a specified, fixed amount or variable depending upon your choice of annuity package, and the payout will not change for the rest of your life.
What is a "Immediate Annuity?'
The initial guarantee period for a foundation annuity
Which of the following statements most accurately describes the tax treatment of annuitized income
a) payments are not taxed until all principal has been paid out
b) payments are fully taxed until all interest has been paid out
c) a portion of each payment attributed to interest is taxed; the balance is not
What is 'C) a portion of each payment attributed to interest is taxed; the balance is not'
Which of the following investment objectives is most consistent with an indexed annuity:
a) To accumulate as much wealth as possible in 20 years, with minimal risk to principal
b) To accumulate as much wealth as possible in 20 years, with the possibility of losses to principal in some years
c) To provide an income, commencing immediately, that will keep up with inflation, and which must continue for life and where no value need remain at the income recipient's death
What is 'a) an indexed annuity is designed to outperform a fixed annuity as interest accumulation is tied to the performance of a stock index.'
In the event of the annuitant's death, the annuity's account value will be paid directly to the beneficiary.
What is 'A guaranteed death benefit?'
This is structured to meet a different type of investor need—to contribute and accumulate capital over your working life to build a sizable income stream for your retirement.
What is a 'Deferred Annuity?'
Access to contract values to a flexible payment deferred annuity
What is 'Partial withdrawals, Extended care, Terminal illness, Chronic illness'
1) Less prior withdrawals taken and/or contract fees assessed. A $30 annual contract fee will be assessed after the 5th contract year if the account value is under $5,000.
2) Contributing only the minimum allowable amounts may not be sufficient to avoid a contract fee.
3) Withdrawals are subject to tax on any gain in the contract and, if taken before age 59½, may be subject to a 10% federal tax penalty. In addition, withdrawals will reduce the death benefit and account value. Clients should consult a tax advisor.
4) Does not apply for pre-existing conditions.
The index to which an indexed annuity is linked experiences a 12% increase. The indexed annuity has a participation rate of 70% and a 12% interest cap. The amount of interest credited to the contract is: a) 8.4%
b)12%
c)10%
What is 'a) 8.4% (12% x 70%)'
With guaranteed rates and easy-to-understand payment options, fixed deferred annuities are one of the most straightforward retirement savings options available.
What is 'Simplicity and transparency?'
The annuity settlement option which reduces the income benefit payout based upon the death of either annuitant is the:
a) life with period certain option
b) life with cash refund option
c) joint survivorship life option
d) joint life option
What is 'c) The joint survivorship life option is typically 50% to 75% of the original joint life schedule'
A guaranteed lifetime withdrawal benefit rider allows the contract holder to receive a lifetime income without giving up control of the asset. This benefit: a) protects the income even if the principal declines to zero b) protects the principal as well as the income c) neither a nor b
What is 'a) protects only the income; the principal is still exposed to market risk'
The 10% tax penalty for premature distributions from annuity contracts does not apply in which of the following circumstances:
a) made before age 59 1/2.
b) is a part of a series of substantially equal periodic payments made for the life of the taxpayer
c) once the surrender charge period has been completed
What is 'b) is a part of a series of substantially equal periodic payments'
Which of the following statements about index annuities is incorrect:
a) The owner of an index annuity does not invest in the securities of the index but will receive excess interest if the movement of the interest benchmark is positive
b) Many index annuities impose steep surrender charges in the early contract years and, as a result, early surrenders could result in principal loss.
c) If index movement is negative, an annual reset structure treats it as zero interest
d) An index annuity could be positioned as a vehicle for "safe high returns."
What is 'd) an indexed annuity is an alternative to the risk of stock investments for consumers looking for more upside potential than is available with CDs or fixed annuities, and who are unwilling to accept principal lost from stocks and bonds.'