Unit 15 – Insurance-Based Products
Unit 152026_2027
– Insurance-Based
_ Study Guide
Products
Unit
& Practice
152026_2027
– Insurance-Based
Questions.pdf
_ Study Guide
Products
& Practice
2026_2027
Questions.pdf
_ Study Guide & Practice Questions.pdf
Unit 15 – Insurance-Based Products
2026/2027 | Study Guide & Practice
Questions
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Unit 15 – Insurance-Based Products
Unit 152026_2027
– Insurance-Based
_ Study Guide
Products
Unit
& Practice
152026_2027
– Insurance-Based
Questions.pdf
_ Study Guide
Products
& Practice
2026_2027
Questions.pdf
_ Study Guide & Practice Questions.pdf
,Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
A 68-year-old individual, who purchased a single premium immediate fixed annuity, elected
monthly payments for life with a 10-year certain settlement option. If the individual lives to
the age of 80,
A)
monthly payments will cease at age 78.
B)
monthly payments will continue to the beneficiary(s) for 10 years after the annuitant's death.
C)
monthly payments will continue until death.
D)
monthly payments will remain fixed until age 78 and then reduce until death.
D) monthly payments will remain fixed until age 78 and then reduce until death.
When choosing the settlement option, life with 10 years certain, the annuitant will receive
payments until the later of death or 10 years.
U15LO4
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
,Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
, Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
Juliette, a math teacher in the local high school, owns a qualified, tax-deferred annuity. When
she retires, what will be the tax consequences of her annuity payments?
A)
Her annuity payments are partly taxable and partly tax-free return of capital.
B)
Her annuity payments are partly taxable as capital gain and partly taxable as ordinary
income.
C)
Her annuity payments are tax free.
D)
Her annuity payments are all taxable as ordinary income.
D) Her annuity payments are all taxable as ordinary income.
The key word here is qualified! The investment Juliette made was with pre-tax dollars, the
money grows tax-deferred, and everything is taxed at distribution at ordinary income rates.
No annuity payment is ever treated as a distribution of capital gains. Note: On the exam, all
contributions to retirement plans are fully -deductible unless something in the question
specifies otherwise.
U15LO5
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
Unit 152026_2027
– Insurance-Based
_ Study Guide
Products
Unit
& Practice
152026_2027
– Insurance-Based
Questions.pdf
_ Study Guide
Products
& Practice
2026_2027
Questions.pdf
_ Study Guide & Practice Questions.pdf
Unit 15 – Insurance-Based Products
2026/2027 | Study Guide & Practice
Questions
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Unit 15 – Insurance-Based Products
Unit 152026_2027
– Insurance-Based
_ Study Guide
Products
Unit
& Practice
152026_2027
– Insurance-Based
Questions.pdf
_ Study Guide
Products
& Practice
2026_2027
Questions.pdf
_ Study Guide & Practice Questions.pdf
,Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
A 68-year-old individual, who purchased a single premium immediate fixed annuity, elected
monthly payments for life with a 10-year certain settlement option. If the individual lives to
the age of 80,
A)
monthly payments will cease at age 78.
B)
monthly payments will continue to the beneficiary(s) for 10 years after the annuitant's death.
C)
monthly payments will continue until death.
D)
monthly payments will remain fixed until age 78 and then reduce until death.
D) monthly payments will remain fixed until age 78 and then reduce until death.
When choosing the settlement option, life with 10 years certain, the annuitant will receive
payments until the later of death or 10 years.
U15LO4
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
,Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
, Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
Juliette, a math teacher in the local high school, owns a qualified, tax-deferred annuity. When
she retires, what will be the tax consequences of her annuity payments?
A)
Her annuity payments are partly taxable and partly tax-free return of capital.
B)
Her annuity payments are partly taxable as capital gain and partly taxable as ordinary
income.
C)
Her annuity payments are tax free.
D)
Her annuity payments are all taxable as ordinary income.
D) Her annuity payments are all taxable as ordinary income.
The key word here is qualified! The investment Juliette made was with pre-tax dollars, the
money grows tax-deferred, and everything is taxed at distribution at ordinary income rates.
No annuity payment is ever treated as a distribution of capital gains. Note: On the exam, all
contributions to retirement plans are fully -deductible unless something in the question
specifies otherwise.
U15LO5
Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf Unit 15. Insurance-Based products.pdf
