Which of the following statements is (are) true concerning the joint and survivor annuity settlement option? I. Under this option, payments begin after the first annuitant dies. II. This settlement option is often selected by married couples. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Which of the following statements is (are) true regarding the taxation of distributions from individual annuities? I. Individual annuity distributions are never taxable. II. Once the annuitant has recovered the premiums he or she paid for the annuity, the entire annuity distribution is taxable. A) I only B) II only C) both I and II […]
Date: September 19th, 2020
Which of the following statements about converting a traditional IRA to a Roth IRA is (are) true? I. Such conversions can be done with no income tax consequences. II. Qualified distributions from a Roth IRA after a conversion are received tax-free. A) I only B) II only C) both I and II D) neither I […]
Date: September 19th, 2020
Which of the following statements is (are) true regarding the Roth IRA? I. Roth IRA contributions are tax deductible. II. Roth IRA investment income accumulates income-tax free. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements is (are) true with regard to the inflation annuity option? I. The initial monthly payment is lower than the initial payment a fixed annuity would have provided if purchased at the same age. II. Periodic payments to the annuitant are adjusted for inflation. A) I only B) II only C) […]
Date: September 19th, 2020
Stan paid an insurance company $50,000 for a fixed annuity when he was 50 years old. At age 62, Stan plans to begin to receive payments from the insurer. There are no guarantees on the number of payments he will receive. Based on the description provided, this annuity can be described as a(n) A) deferred […]
Date: September 19th, 2020
During the funding period, the premiums paid for a variable annuity are used to purchase A) annuity units. B) immediate participation shares. C) mutual fund shares. D) accumulation units. ANSWER Answer: D
Date: September 19th, 2020
Which of the following statements is (are) true with respect to a joint-and-survivor annuity? I. Some joint-and-survivor annuities reduce the income payment after the first annuitant dies. II. No payments are made after the first annuitant dies. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Bridget started to fund a variable annuity. Three years later, she experienced financial difficulty. She called her agent and cancelled the contract. The insurer returned all but 4 percent of the account balance. The 4 percent kept by the insurer is a(n) A) account administration fee. B) investment management fee. C) front-end load. D) surrender […]
Date: September 19th, 2020
Which of the following statements is (are) true with respect to variable annuities? I. The price at which accumulation units can be purchased fluctuates during the funding period. II. The value of annuity units fluctuates over time. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
