1 Annuities

Question 1

equity indexed annuity

1. returns
2. highest when?

Answer 1

guarenteed

index up

Question 2

equity indexed annuity

1. participantion rate
2. cap

Answer 2

% of index gains recvd

max gains annually

Question 3

deferred annuity

surrender

Answer 3

includes surrender period-

charge for early w/d

< 59 1/2 - 10% tax penalty

Question 4

variable annuity

Answer 4

death bene only in effect if

annuiant not rcv pmts

Question 5

bonus annuity

Answer 5

ins co. adds

1-5% initial dposit

• charges additional fees
• longer surrender period

Question 6

exchanging annuities

Answer 6

avoid taxes

surrender period resets

Question 7

If insured dies before paid out

1. Life only / Stright life
2. Unit Refund Life / period certain

Answer 7

ins keeps $$

beneficiary gets $$

Question 8

life w/ period certain

Answer 8

ins co pays out for the longer period of the two

Question 9

annuities must register with

Answer 9

state ins

sec

Question 10

death benefit

tax rates

Answer 10

taxed at benefit tax rate

proceeds - cost basis

Question 11

voting rights (3)

Answer 11

elect board of managers

changing investment obj & policies

changing auditor / acct firm

Question 12

guarentee min w/d rider

Answer 12

pmts stop when principal is reached or term ends

Question 13

taxes for early surrender

Answer 13

normal income tax rate on earnings

and

10%

Question 14

taxes for early surrender

what are taxes?

50 ins, 60k annuity amt

Answer 14

10 k @ income tax rate

+

1 k at 10% tax penalty

Question 15

regular life insurance

if cashed in what are taxes?

Answer 15

cash basis = premium put in

w/d is cash basis

no tax

(only what you put in)

Question 16

annutiy w/ life ins

if cashed in what are taxes?

Answer 16

taxed regardless of cash basis

Question 17

non-qualified

Answer 17

purchased w/ non-tax $

already taxed income

Question 18

tax qualifed var annuity /

indv ret annuity

3 items

Answer 18

funded w/ pre-tax $

max = same as trad IRA

w/d must begin @ 70 1/2

Question 19

loans

Answer 19

taxable income

Question 20

SEPP

Answer 20

pmts must be for 5 yrs or 59 1/2

which ever comes 1st

Question 21

AIR

Answer 21

assumed interest rate

Question 22

Pay out

Answer 22

AIR

+

this mo. payout to last mo. payout

Question 23

variable annuity provides

taxable/ or tax deferred growth

Answer 23

tax deferred

Question 24

Lifetime withdraw benefit

Answer 24

lifetime income if acct bal =0

Question 25

Immediate Life Annuity

Answer 25

purchase annuity units directly

Question 26

Fixed?

Accumulation Units

Annuity Units

Answer 26

Accumulation - no

Annuity - yes (value can change)