How is the distribution taxed? C) each annuity unit's value and the number of annuity units vary with time. C)I and III. B)I and IV. C) II and III. D)variable annuities. How does an indexed annuity differ from a fixed annuity? An immediate annuity is designed to pay an income one time-period after the immediate annuity is bought. The accumulation unit's value is used to calculate the total value of the account. *Only variable annuities have payout plans that provide the client income for life. When money is deposited into the annuity, it is purchasing accumulation units. A 10% penalty applies only if distributions begin before age 59-. A)II and IV. III. A variable annuity is a security and must be registered with the SEC, not FINRA. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. When the annuitization option is selected, each payment represents both capital and earnings. C)Corporate bonds. If a 42-year-old customer has been depositing money in a variable annuity for 5 years, and he plans to stop investing but has no intention of withdrawing any funds for at least 20 years, he is holding: D)suitable if she has enough equity in the home to fund the variable annuity without cashing out the other VA contract, Based on the information given in the question, the VA recommendation would not be suitable. Question #42 of 48Question ID: 606830 An example would be if a life annuity with 10-year period certain contract holder died after 5 years, payments would continue for 5 more years to the beneficiary and then stop. An annuitant assumes the investment risk of a variable annuity and is not protected by the insurance company from capital losses. The number of annuity units is fixed at the time of annuitization. Though there is no beneficiary designation during the annuitization, this is not an issue for this annuitant. Reference: 12.3.3 in the License Exam. B) Ordinary income taxation on the earnings withdrawn until reaching the owner's cost basis. Question #40 of 48Question ID: 606800 C) II and IV If the contract holder dies before the period expires, the remaining payments are made to the beneficiary. A 32-year-old with a company-sponsored 401k plan who will need a lump sum soon to finance graduate school tuition Variable annuity salespeople must register with all of the following EXCEPT: Consequently, the client pays taxes only on the growth portion of the withdrawal ($10,000). Her intent was to use the funds for the down payment on a house after graduation. Lifetime vs. fixed period annuities Herpes Zoster has all of the following characteristics except: Distribution of dividends occurs during the accumulation period. One of the following would achieve that objective but a suitability discussion regarding it's risk should also occur. The number of annuity units is fixed at the time of annuitization. Contributions to an IRA may be tax deductible, depending on the individual's earnings and participation in a company-sponsored qualified retirement plan.

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