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32 Cards in this Set
- Front
- Back
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The _____ _____ _____ is the amount that must be earned in a variable annuity to keep the level of payments the same.
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assumed interest rate
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What is the "separate account" separate from?
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The general account where all of the other policy holders money is deposited.
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What is the Treasury Life Expectancy Multiple?
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It is a annuity payout exclusion based on the age and sex of the annuitant.
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One feature both fixed and variable annuities share is that all taxes on earnings during the accumulation period are ____ until the payout period begins.
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deferred
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During the payout period, the number of annuity units is a ______ amount.
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constant. What varies on a variable annuity is the value of the annuity unit.
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An annuity contract enables an investor to give ___ to an _____ ____ to do what?
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money; insurance company;
Put the money into one of its investment portfolios. |
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Variable annuities cannot be sold without a _______.
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prospectus
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If an investor wanted to do a partial withdrawal from a non-qualified annuity, the IRS would treat the funds withdrawn on a ____ basis.
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LIFO
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Non-Forfeiture Provisions are stated in the Prospectus which say that, during the accumulation phase, whatever an investor has invested in the annuity ______.
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is his to do with whatever they wish.
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What is a fixed annuity?
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When an insurance company agrees to pay a Fixed Monthly amount beginning on an agreed on date.
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The Expense Guarantee is stated in the Prospectus as a guarantee that _________.
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the operating expenses of the variable annuity will never exceed a certain amount, typically 1%.
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What are the three methods of purchasing an annuity?
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1. Single Payment Immediate
2. Single Payment Deferred 3. Periodic Payment Deferred Annuity. |
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Once the annuity has been annuitized, the investor loses ____ ____ ___ the account.
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all control over
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Unlike government retirement programs, there is no set ___ in an annuity that one must begin receiving payments, instead _____.
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Age;
it is mutually determined between the investor and the insurance company. |
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The mortality Guarantee is stated in the Prospectus and guarantees ______.
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the annuitant will get a monthly check for as long as he lives.
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How is the "Identified Shares Method" employed on partial withdrawals from a Mutual Fund? What is the alternative?
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The IRS allows the investor to state which shares were sold early. The alternative is the IRS will use the LIFO method.
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The Death Benefit is stated in the Prospectus and says that the investor, in the accumulation phase, is guaranteed to _______.
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get back no less than the amount of his investment should he die before annuitizing.
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During the annuity period the holder of a variable annuity assumes ____ ____, and this is why the SEC has determined they are _______.
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investment risk; securities
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With an early withdrawal from an annuity, the investor is subject to what two taxes?
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1. His income tax rate on the qualified portion of the withdrawal.
2. A 10% tax on the qualified portion as a penalty for early withdrawal. |
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The maximum sales charge for a variable annuity is ____ but only for the first ___ years.
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8 1/2%;
12 |
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If the investor dies during the accumulation period of a variable annuity, the death benefit provision calls for ____.
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Payment of the total of the investments plus all the earnings to-date to the beneficiary.
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The specific name given to the separate insurance company portfolio for the variable annuity contract holders is the ____ ___.
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separate account
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Instead of shares, an insurance company keeps track of your annuity in the Separate accounts as ____ ____.
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accumulation units
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The period of time that an investor puts money into an Annuity is called the _____ ___.
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accumulation period.
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The earnings portion of the proceeds of a death benefit provision paid to a beneficiary are taxed as _____.
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ordinary income
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The period of payout is called the ___ ___.
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annuity period.
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Forward Pricing means ___.
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The price assigned when accumulation units are next calculated.
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Since both fixed and variable annuities are _____ products, the appropriate State ____ licence is required to sell them.
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Insurance; Insurance
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On the date the Annuity switches from accumulation phase to payout phase, it is _______, which means the investor chooses his payout option.
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annuitized
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Who assumes the risk in a fixed annuity?
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The insurance Company
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The value of an accumulation unit is determined at what time?
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4PM Eastern Time.
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On the day an annuity is annuitized, the insurance company converts the accumulation units into a fixed number of ______ ____.
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annuity units
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