Unit 24 Flashcards
high-water crediting method is
Unit value, cash value - when are they valued
Unit values are computed each day. Policy cash values are a monthly computation. The death benefit is computed annually
Among the reasons to consider investing in a variable annuity would be all of the following except
In return for granting tax deferral on all gains in the account, the IRS taxes everything over the investor’s cost basis as ordinary income. There is never a capital gain with a variable annuity. Some insurance companies will place a limit on the amount that may be invested, especially for older clients, but unlike IRS rules on retirement plans, this is strictly a company-by-company decision, not a law. Variable annuities are generally sold with a death benefit provision guaranteeing that the beneficiary will receive the higher of the amount invested or the current value of the account. Because there is a specifically named beneficiary, annuities do not go through the probate process.
