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30 Cards in this Set
- Front
- Back
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All of the following are benefits of an annuity except:
a. interest earned is taxed deferred b. Expenses and surrender charges are less than most other retirement products. c. you can lock in a monthly income stream d. benefits may be paid to a beneficiary if an annuitant dies prematurely |
Expenses and surrender charges are less than most other retirement products.
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When making recommendations to senior citizens, the following information must be taken into account except:
a. sources of income b. client's investment experience c. the senior's awareness of your marital status d. product time horizon |
c. the senior's awareness of you marital status
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True or false:
Before you visit a senior citizen`s home, you must provide, a 12point type written notice stating that a sales presentation will be given |
False
A small technicality; the notice should be in 14 point type. |
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The IRA early withdrawal penalty does not apply to distributions below except:
a. used to pay back taxes b. the IRA owners death c. used to buy a first time home d. used to pay for higher education for your friend |
d. used to pay for higher education for your friend
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The annuitization period or liquidation period is the: ________
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annuity period
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What is the disadvantage in buying a fixed annuity?
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Purchasing power may be eroded over time due to inflation
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If both an older and younger person had annuity funds of the same amount and both annuitize on the same date, exercising one of the life options, which individual would receive the larger payment?
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The older person
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An annuity that is purchased with a single, lump sum and provides income within one year is an:
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Immediate annuity
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What annuity benefit will pay a specific amount for the remainder of the annuitant`s life?
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Straight life
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What is the difference between an immediate and a deferred annuity?
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Deferred payments are postponed, while the immediate payments start soon after 1st payment.
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What annuity settlement is most appropriate for providing retirement income to a married couple?
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Joint and survivor
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True or False:
In regards to variable annuities, The method of purchase and settlement options, are different from a fixed annuity |
False
Variable annuities can be purchase the same as fixed annuities, either by single payment or periodic payments. |
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Premium payment plans for a Variable Annuity contract would include all of the following choices, except:
a. deferred premium b. single premium c. level premium d. flexible premium |
a. deferred premium
Deferred is not a method of payment, it refers to when payout will begin. Deferred means payout will begin in the future, at least more than 1 year from contract date. |
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True or False:
Annuities themselves are considered qualified plans by the IRS |
False
Annuities are treated on a tax deferred basis, but are not considered qualified plans unless they are in a qualified vehicle, such as a IRA or TS |
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What annuity payout option provides for lifetime payments to the annuitant but guarantees a certain minimum term of payments, whether or not the annuitant is living?
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Life with period certain
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Selling each of the following would require an additional securities license, except:
a. Sand P 500 indexed annuity b. deferred variable annuity c. variable TSA d. Immediate variable annuity |
a. S and P 500 indexed annuity
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During the accumulation period of a deferred variable annuity, the value of the individual account arises or falls based on the __________
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Investment results
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True or False:
An installment refund annuity guarantees a specific amount of benefits, payable to the annuitant only; if death occurs prior to total payout, a portion of the premium is refunded to the annuitants estate or beneficiary |
False
*A refund annuity guarantees that the principal will be paid to either the annuitant or their beneficiary. |
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The person who receives payments from the annuity is an ________-
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annuitant
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What annuity payout/benefit option does not guarantee a lifetime income to the annuitant?
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An Annuity certain payout
*Annuity certain payout is for a fixed period of time. |
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An annuity is a living benefit and a/an:
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insurance policy that makes a series of periodic payments in exchange for a lump sum payment.
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Who would receive the highest payout for a $20,000 single premium immediate annuity, assuming all four contracts are identical?
a. Joe, age 60 b. Sylvia, age 63 c. Audrey, age 60 d. Barney, age 65 |
d. Barney, age 65
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What type of annuity would provide a locked in, guaranteed rate that makes monthly payments now?
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Immediate fixed
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What happens to the annuity if an annuitant dies in the 3rd year of a 5 year period certain contract?
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The payments continue to the beneficiary until the end of the 5 year period.
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All of the following are annuity premium factors except:
a. sex b. assumed interest rate c. medical history d. age |
c. medical history
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Jason purchased an annuity, making a single lump-sum payment on Dec. 1 2009. His benefits began on Jan 1, 2010. What kind of annuity did Jason buy?
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immediate
*Payout began within one year of the contract date which makes this an immediate annuity. The correct name would be a single premium immediate annuity (SPIA). |
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True or False:
Deferred annuity- fixed accounts require a separate account to be used |
False
Only variable accounts would have a separate account to manage the invested funds. |
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What type of annuity would feature a monthly payment and would not pay out immediately?
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Flexible premium - differed annuity
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Which of the following is not considered an IRA:
a. Roth IRA with fixed annuity b. Simply IRA c. 529 college savings plan d. ESA |
c. 529 college savings plan
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Which of the following IRA contributions are not tax deducible when the funds are contributed?
a. simple IRA b. roth IRA c. sep IRA d. Traditional IRA |
b. roth IRA
*Contributions are NOT deductible when the funds are contributed, but the Roth IRA earnings accumulate tax- free and remain tax-free upon distribution. |
