The contract has a schedule of surrender charges, beginning with a 7% charge in the first year, and declining by 1% each year. This annuity is nonqualified, which means the client has paid for it with after-tax dollars and has a basis equal to the original $29,000 investment. A)Joint tenants annuity. Contributions to a nonqualified annuity are made with the owner's after-tax dollars. The growth portion is taxed as a capital gain. Variable Annuities: A Good Retirement Investment? Your customer is interested in a variable annuity but is unclear on some of the details regarding different specifications and riders that can be attached to the contract. B)FINRA. A variation of lifetime annuities continues income until the second one of two annuitants dies. contract. You can tailor the income stream to suit your needs. Once annuitized, the number of annuity units does not vary. C)the yield is always higher than bond yields. Question #31 of 48Question ID: 606836 C)complete all paper work to purchase the annuity contract and obtain the clients signature immediately. When the second party dies, all payments cease. The client's investment objectives, tax bracket, investment experience and risk tolerance all align well with a VA recommendation. 8. Variable annuities should be considered long-term investments due to the limitations on withdrawals. B)II and III. The individual already making the max retirement acct contributions, with cash to invest, would be most suitable for a VA recommendation. the SEC. In general, annuities have the following features. Which Earns More: Variable or Fixed Annuities? Generally, a life only contract pays the most per month because payments cease at the annuitant's death. If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. The following annuities are available in fixed or variable form: 1. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. All other tax provisions that apply to nonqualified annuities also apply to qualified annuities. [D]The portfolio may contain mutual fund shares. 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 Sub accounts and mutual funds are conceptually identical, but sub accounts don't have ticker symbols that investors can easily type into a fund tracker for research purposes. Question #22 of 48Question ID: 606803 If he wants to purchase an annuity and start receiving payments now, what would you suggest? Once a variable annuity has been annuitized: That can adversely affect your returns over the long term, compared with other types of investments. 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. Therefore, variable annuities must be registered with the state insurance commission and the Securities and Exchange Commission. This factor is used to establish the dollar amount of the first annuity payment. Most variable annuities are structured to offer investors many different fund alternatives.
