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31 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What license do you need for a Variable Annuities
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Series 6 or 7. No guaranteed rate
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Do you need a series 6 license to sell, fixed annuities |
No. Remember there is a guaranteed rate of return |
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Tax deferred means
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you don't pay taxes until you withdraw the funds
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What is an annuitant
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the party receiving the benefits of an annuity. The annuitant usually owns the annuity.
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The accumulation period for an annuity is aka. Is the money earned tax deferred? |
the pay-in period. Can last as long as the annuitant wants. There is always a beneficiary or estate. During this period Money is earning tax deferred |
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Fixed annuity |
has a fixed rate of return, usually 4%. Backed by Guaranty Association since funds are invested in the insurer's general account. |
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What is the early withdrawal penalty for life insurance and till what age does it go into effect |
10% until age 60. Also have to pay taxes. |
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What type of annuity has a fixed rate of return
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Fixed Annuities. Return is usually 4%
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Who bears the investment risk on a variable and fixed annuity (2 answers)
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Fixed Annuity insurer bears the risk. On a Variable annuity the annuitant bears the investment risk because there is not guarenteed rate of return
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The general account |
Fixed annuities are funded by the insurance company's General Account and funds are invested very conservatively |
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Equity indexed annuities |
a fixed annuity where both the principal and the interest are guaranteed. |
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Immediate Annuity
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pay-out (annuitize) period begins right away
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Single premium deferred annuity |
purchased with a lump sum by the annuitant, but the insurance company invests your money until you reach a certain age, say 65. |
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separate account |
Used for Variable annuities. Funds are usually invested into the stock market |
p. 117 |
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qualified annuity |
tax-qualified by the IRS (ie. TSA). Funded with pre-taxed dollars therefore, upon annuitization, all distributions are taxable as ordinary income. |
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nonqualified annuity |
is funded with after tax dollars. Upon annuitization, only that portion of the distribution that exceeds the annuitant's cost basis is taxable. |
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Difference between qualified and non-qualified annuities. Is money taxed on qualified annuities when you withdraw? |
Qualified (only one), TSA (Tax shelter annuity) 403-b. Usually for teachers, Non-Profit employee or religious affiliations. Money is federally taxed when you take money out, not taxed during pay-in period? |
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Market value adjusted annuity
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a type of Variable Annuity where a policy-owner commits a sum of money for a certain period of time. Usually 1 to 3 years.
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TSA
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Tax shelter annuity
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What is the required Suitability Information |
Occupation, Occupation status, Marital status, age, number of dependents, sources of income, yearly income, existing insurance, cost to the customer, source of funds to pay premiums, liquid net worth, and tax status. |
p. 121 |
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Pure and Straight Life annuity (pay-out) option
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aka Life Income option. Pays annuitant for as long as they live but if annuitant dies, the insurer keeps the money. No beneficiary
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p. 120
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Life Income with Period Certain |
Pays beneficiary if the annuitant dies within the period certain. The longer the period certain is, the lower the monthly benefits to the annuitant will be. Period Certain can be 10, 20, or 30 years. Has the highest payout |
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Refund life payout option |
if they die before recovering the value of their account, the insurer will refund the difference to the beneficiary. This is the most common and popular option. The beneficiary can choose cash refund or installments. |
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Joint Life option
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usually more than one annuitant. Payments made to both parties while live but, payments stop when the first party dies
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Joint-and-Survivor option
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pay while both parties are alive, but monthly payments will continue on to the survivor at a reduced rate when the first annuitant dies.
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Free look period with seniors 65 or older is how many days? If before age 65, how long? |
After 65, free look is 30 days at policy delivery. No less that 10 point-type. Prior to 65, free look is 10 days. |
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Joint program between Federal and State government to provide health ins to people with few assests and little income
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Medicaid (medical welfare) or in CA (Medi-Cal)
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THIS POLICY MAY BE RETURNED WITHIN 30 DAYS FROM THE DATE YOU RECEIVED IT. DURING THAT 30 DAY PERIOD, YOUR MONEY WILL BE PLAYCED IN A FIXED ACCOUNT OR MONEY MARKET FUND, UNLESS You DIRECT THAT THE PREMIUM BE INVESTED IN A STOCK OR BOND PORTFOLIO UNDERLYING THE CONTRACT DURING THE 30 Day Period
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Medi-Cal pays for people to be in nursing homes
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A deferred annuity always has a beneficiary during the
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Pay-in Period
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Which annuity payout option has no beneficiary?
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Life Income
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Deferred annuities |
purchased with a single lump sum payment OR with level premium payments over a period of time. Premium NOT Tax deductible. |
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