Unit 9: Insurance Products

Question 1

Fixed Annuities

Answer 1

Not Securities
Purchasing power risk
Credit risk
No market risk

Question 2

Variable Annuities

Answer 2

A security
Variable, market-based income for life
Credit Risk
Market Risk

Question 3

Joint Life payout

Answer 3

Lowest monthly payment

Question 4

Purpose of annuity contract:

Answer 4

retirement income for life

Question 5

Age of no penalty for annuity withdrawal

Answer 5

59.5

Question 6

Before annuitization, a VA owner holds:

Answer 6

Accumulated units

Question 7

Variable annuities actual payouts based on:

Answer 7

1. Assumed interest rate (AIR)
2. Preformance

Question 8

Guaranteed Minimum Income Benefit (GMIB)

Answer 8

a feature to ensure the receipt of a minimum level of payment, regardless of the performance of the subaccount

Question 9

VAs are suitable once the 401k and IRA are..

Answer 9

fully funded

Question 10

1035 exchange

Answer 10

Investors may face: surrender charge on old annuity, new surrender charge on new annuity

Question 11

Extra suitability scrutiny if client did another 1035 exchange within the last…

Answer 11

36 months

Question 12

Variable life insurance

Answer 12

fixed premiums
fixed DB

Question 13

Universal Variable life insurance

Answer 13

Flexible premiums
flexible DB

Question 14

Is “Prestige Variable Product” a permissible description?

Answer 14

No, because “product” needs to be clearly explained. “Prestige” is OK