Acronymns/Definition Flashcards
AAV
Asset Account Value
Annual Income - Client Profile
- This figure represents the client’s taxable estimated gross annual household income.
- It should include total wages, salaries, tips, commissions, bonuses and investment income, such as dividends and income from rental property (if applicable) for the household
BVT
Book Value Transfer
CTIR
Children’s Term Insurance Rider
CWC
Contingent Withdrawal Charge
DCA
Dollar Cap Averaging
Define “Cap Rate”
Serve to limit the amount of growth in the applicable market index that will be credited to the EIA
Define “Dollar Cost Averaging”
• DCA is a systematic and efficient method of investing. • An individual continuously invests a fixed dollar amount into their retirement vehicle every month. • Due to constant fluctuation, an investor will purchase more units of a security when prices are low and less when price increase. • The benefit is that over the long term, the cost will average out.
Define “Non-qualified Annuities”
• Annuities owned outside qualified retirement plans such as a 401(k) or 403(b) at work or an IRA • Funded by after-tax dollars
Define “Pro Rata”
• A term used to describe a proportionate allocation. • It is a method of assigning an amount to a fraction according to its share of the whole. • For example, if two partners own a company (one with 51% ownership and the other w/ 49% ownership) then the pro rata distribution of profit will be 51% and 49% respectively.
Define “Qualified Annuities”
• Annuities purchased to fund qualified retirement plans such as a 401(k) or 403(b) at work or an IRA • Funded by pre-tax dollars
Define “Signature Guarantee”
• A signature guarantee is a form of authentication, issued by a bank or other financial institution, which verifies the legitimacy of a signature and the signatory’s overall request. • This type of guarantee is often used in situations where financial instruments are being transferred.
Define “Vesting”
• It is a legal term that means to earn a right to future payment, asset or benefit. • In this case, it means you earn the right to the future payment of the defined benefit plan which stems from the employers contributions.
Equity-Indexed Annuity Participation Rate
• Method for determining the percentage of the market’s index growth that will be credited to the EIA • For example, a 75% participation rate of a 8% market rate growth will allow the EIA to be credited with 6% interest (.75 X .08 = 6%)
GAWA
Guaranteed Annual Withdrawal Amount
GIO
Guaranteed Interest Option
GTWR
Guaranteed Transfer Withdrawal Rate
GWB
Guaranteed Withdrawal Benefit
GWR
Guaranteed Withdrawal Rate
Household Expenses - Client Profile
Monthly Fixed HH Expenses — Monthly reoccurring fixed HH expenses should be included in this section, e.g., mortgage, rent, utilities, insurance and car payments.
IL Legacy
Incentive Life Legacy
Investment Experience - Client Profile
Includes all qualified and non-qualified experience within an asset class. Experience does not require there to be any current holdings within the referenced asset class.
Investment Objective - Client Profile
• When selecting an investment objective and risk tolerance on the application, advise the client to choose one that matches his or her stated objective and tolerance level as it applies to that particular purchase. • This practice helps ensure consistency between a client’s investment objective and risk tolerance and the selected asset allocation within the product. • If the client’s investment objective and risk tolerance for a particular purchase is inconsistent with his or her overall general profile, maintain notes to this effect in the Client File to avoid confusion.
LBR
Living Benefits Rider
Liquid Net-worth - Client Profile
• Make sure the figure listed on the application reflects the client’s liquid net worth, as opposed to total net worth. • Liquid net worth includes what the client holds in cash and assets that can easily convert to cash, such as, money market shares. • Liquid net worth excludes the value of the client’s residence.
LTCS
Long-term Care Services
MSO
Market Stabilizer Option
MVA
Market Value Adjustment
Net-worth Modified - Client Profile
• Is the value of your assets minus your liabilities. Assets include all your Current Holdings / Total Assets above plus personal property. • Do not include your primary residence among your assets. For liabilities, include any outstanding loans, credit card balances, taxes, etc. • Do not include debt on your primary residence among your liabilities.
Other Property - Client Profile
Other Property(ies) — Enter other properties’ net equity that are owned by the client, i.e. investment real estate, vacation homes, etc.
PAV
Policy Account Value
PIB
Personal Income Benefit
Politically Exposed Person (PEP) - Client Profile
• A PEP is someone who has been entrusted with a prominent public function such as a mayor, governor, or someone serving in public office. • A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
PUDBG
Paid-up Death Benefit Guarantee
SIO
Structured Investment Options
Tax Advantaged - Client Profile
• “Tax advantaged” is an investment objective option available on the AXA Advisors brokerage account application and client account record (“CAR”) form only. • This option may be selected when it is the client’s objective in making a purchase through a brokerage account to minimize potential tax consequences on gains in his or her respective investments. • This may be achieved by investing in tax-exempt securities, such as municipal bonds or municipal bond funds.
Tax Bracket - Client Profile
The applicable tax bracket is the client’s marginal federal tax bracket.
Time Horizon - Client Profile
• The time horizon selected on the application should be the length of time the client intends to hold the entire investment, which usually should exceed, or coincide with, the expiration of any applicable surrender charges or contingent deferred sales charges. • If the client intends to take a withdrawal that will subject him or her to a surrender charge or contingent deferred sales charge, the time horizon becomes the length of time the client will hold the investment product before taking such a withdrawal
Total Assets - Client Profile
• The “Investment/Assets” section of the variable product applications seeks to capture the total of a client’s financial investment assets. • This would include qualified retirement plans, bonds, annuities, mutual funds, stocks and other types of marketable securities, excluding real property holdings, such as the client’s residence
VIO
Variable Investment Options
VRU
Enhanced Voice Recognition Unit
What does qualified/non qualified refer to?
The taxation of retirement plans.
Ask the following questions when inventorying the life insurance coverage,
- Have you recently reviewed your life insurance policies
- Have you completed a comprehensive life insurance needs analysis?
- Do your life insurance policies provide provisions to pay for long term care expenses?
