a variable annuity has which of the following characteristics

If the annuitant dies during the accumulation period, his/her beneficiary will receive the promised annuity payments. This Rule applies to recommended purchases and exchanges of deferred variable annuities and recommended initial subaccount allocations. A variable annuity is a contract that provides fluctuating (variable) rather than fixed returns. Which of the following is a characteristic of a variable annuity? D) variable annuities may only be sold by registered representatives. Deferred annuities A deferred annuity is designed to collect premiums and accrue investment income over an extended period for payout at a later timefor example, when an individual retires. Live. Inflation-hedging, using both tax deferral combined with market growth potential, is made possible by variable annuities #. during the annuitization phase of a variable annuity, the payouts are based on performanceof the separate account, not on the insurance company's returns. 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. Assume that all annuities have the same positive interest rate. A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received . Overview. ($5,000) to a stock fund. The features of variable deferred annuities are many. The payout might be a very long time; deferred annuities for retirement can remain in the deferred stage for decades. . A portion of the initial investments. a variable annuity does not guarantee an earnings rate of return. Annuities are valued by discounting the future cash flows of the annuities and finding the present value of the cash flows. C)the payout plans provide the client income for life. Underlying equity investments T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. A) variable annuities offer the investor protection against capital loss. Income that cannot be outlived by the owner The difference is similar to that of a mutual fund vs. a money market account. Q&A. 9 - Annuities. n = Total number of periods of annuity payments. The value of the direct S&P investment account would fall to $104,500. Check all that apply. Payments from variable annuities can increase if the portfolio performs well and decrease if it loses money. Valuation of Annuities. A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received . Which of the following are characteristics of a perpetuity? Which of the following are characteristics of a perpetuity? Fixed Annuity . 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 b. deferred annuity. Any variable annuity you choose should have at least one fund in each of the following categories: an aggressive growth fund; a growth fund or S&P 500 index fund; a growth and income fund or . r = Interest rate. Value in separate account b. Accumulation units c. Death benefit d. Cash value. Underlying equity investments. They enable you to potentially benefit from market upside by investing in mutual-fund like sub-accounts. 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 Explanations These payments can be scheduled as specific amounts known as scheduled premium deferred annuities or they can change according to your plans or ability to pay. During this lesson, we will review the characteristics of variable life insurance and annuity contracts. The insurer would do which of the following? The features of variable deferred annuities are many. However, since fixed annuities are less risky than variable annuities they tend to have less investment flexibility or opportunity for growth. A joint & 2/3 fixed or variable annuity may have all the following characteristics except: A predictable monthly Income for life for two people based upon an interest rate in effect at the time it is annuitized. Some variable annuities do guarantee the investor's return of principle in the case of premature death or during a specified time following the contract's issue date. Check all that apply. Each type has its own level of risk and payout potential. Ch. See Page 1. Deferred Annuity. Which of the following annuities pays benefits based on units rather than specific dollar amounts? There is no black-and-white answer to this issue, but you need to understand the advantages and disadvantages of these investments before making a decision. Variable annuity contracts are those in which the insurer agrees to make future payments or annuities to the policyholder as agreed. 2100: $10,100 minus the $100 deductible equals $10,000. A. Variable whole life policies have a guaranteed minimum death benefit. variable annuity without paying tax at the time of the transfer. Deferred annuities, also referred to as investment annuities, are available in fixed . Variable annuities operate in similar ways to . 12.2. If Stagmite were to incur covered expenses of $10,100, how much would Stag be out of pocket? All of the following characteristics are shared by both a mutual fund and a variable annuity's separate account EXCEPT: A)the client assumes the investment risk. C) Interest rates are often associated with a stock index. A registered representative explaining variable annuities to a customer would be CORRECT in stating that: a variable annuity guarantees an earnings rate of return. An annuity which starts paying monthly benefits within a month after issuance is called a (n) a. period certain annuity. It is a variable annuity. Jones Real Estate Co. experienced the following events during the organizing phase and its first month of operations. Infinite time period A. I and III only B. I and IV only C. II and III only D. II and IV only E. I plus either III or IV. . Annuities do have withdrawal fees that the insurance company will keep if money is withdrawn during a certain period, usually five to seven years after the annuity is purchased.Withdrawal fees are in addition to any taxes or tax penalties that may be due when money is taken out of . The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more . Members' Responsibilities Regarding Deferred Variable Annuities. The full deposit to an annuity goes to work earning money. Which of the following are characteristics of a perpetuity? All of the following types of annuities are available in fixed or variable forms. Which of the following is a characteristic of a variable annuity? Instead of paying regular premiums to an insurer that makes a lump-sum payment upon death, the investor gives the insurer a lump sum in return for regular income payments until death, or for a specified period of time, typically starting one to 12 months after receipt of the investment. B)the investment portfolio is managed professionally. An annuitant assumes the investment risk of a variable annuity and is not protected byt he insurance company from capital losses. A Variable Annuity has which of the following characteristics? During the annuity period, the number of "annuity units" fluctuates with the value of an underlying . 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. Instructions Using the information, prepare. Some annuity contracts provide a way to save for retirement. Thus, you decide how much risk you want to take and you also bear the investment risk. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. Explanation: Annuities are defined as a series of equal payments at regular intervals either made, received, or both, for a certain number of periods. Ordinary Annuity: An Ordinary Annuity has the following characteristics: The payments are always made at the end of each interval; The interest rate compounds at the same interval as the payment interval The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three. . d. immediate annuity. During the annuity period, the number of "annuity units" fluctuates with the value of an underlying . Bianca has FINRA Series 7, 63, SIE licenses and has licensing program at her firm for 5+ years. Variable Annuities An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. The choices are similar to those for a family of mutual funds. A) II and III. Some examples of annuities: Mortgages, Car payments, Rent, Pension fund payments, Insurance premiums. Perpetuity involves a constant periodic flow of cash with no maturity. Other types of annuities. 9 - Annuities. Annuity units are units of ownership when the contract is in the payout stage. Variable annuities operate in similar ways to . A variable annuity is a type of annuity whose value is tied to the performance of an investment portfolio. Variable annuity salespeople must register with all of the following EXCEPT: A) FINRA. 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 Many variable annuities offer a choice of investment mediums. Ch. What Is a Variable Annuity? The value of your contract will vary depending on the performance of the investment options you choose. They offer broad diversification in the securities market and potential growth, all while using the power of tax deferral. The correct answer is: Defines a securities product. Perpetuities are also called annuities with an extended, or unlimited, life. Which of the following do Fixed and Variable Annuities have in common? A Who bears the investment risk of the annuity policy B A guarantee of a minimum rate of interest credited during the accumulation period C The types of settlement options available at annuitization D Vulnerability to loss of purchasing power over the long run Pros of Variable Annuities. You have the opportunity to invest in several annuities, which of the following 10-year annuities has the greatest present value (PV)?

a variable annuity has which of the following characteristicsdifference between power of appointment and discretionary trust

a variable annuity has which of the following characteristics