Seg Fund Questions and Answers(SCORED A+)

S is 68,single. She has saved $250,000 in non-registered funds, and is seeking guaranteed income to last her as long as she lives. She wants to maximize her available income for the immediate future. Her children are financially comfortable. Which annuities will be most appropriate for her? - ANSWER-section 5.3 Prescribed life straight annuity - By making the annuity a prescribed annuity, she will reduce her tax bill and maximize her income. J has purchased an IVIC featuring a Guaranteed Lifetime Withdrawal Benefit. In the first year of guaranteed income, Joshua's income was $12,200, or 5% of the value of the contract. This was the guaranteed amount. At the same time, J's investment returns were 7% and his management fees represented 4% of the value of the fund. What will the consequences be for J's income in the future? - ANSWER-His income will remain at least $12,200 - The major feature of these products is that they provide guaranteed income for life. This income will continue as long as only the minimum investment is withdrawn. Withdrawals beyond the minimum could put this guaranteed income at risk. Poor investment performance, a long life, or management fees will not jeopardize the guaranteed income. S invested $145,000 into an IVIC on June 27, 2009. She chose a balanced fund with a 3% MER, a 75% maturity and death benefit guarantee, and two reset options per year. According to her statement, the fund increased for a while reaching $178,000 then dropped to $135,000 as of March 13, 2015. If she had exercised a reset option when the fund was at its peak and held it to maturity, what would she have gained beyond the original guarantee? - ANSWER-The difference between 75% of $178,000 and $135,000-The MER should already be deducted from her fund amounts. L is the annuitant of a life annuity with a 20-year guarantee. She is 78 years old, and the annuity was purchased as an immediate non-registered annuity when she was 65.You are working with L and her children to build an estate plan for her. Which best describes the implications of her annuity for the purpose of building an estate plan? - ANSWER-The annuity will pay an income to a named beneficiary for no more than 7 years-The guaranteed portion of a life annuity, if there is a guarantee, is calculated from the date of purchase of the annuity. Once Lindsay hits age 85, her guarantees will end, but her annuity will continue until her death. What is an advantage of making periodic deposits to a segregated fund? - ANSWER-Creates a longer maturity period for investment growth G is looking to buy an ann