4-Hour Annuity Suitability and Best Interest
Standards Exam WebCE questions with accurate
answers
All of the following are common modal annuitization payout options
EXCEPT: Ans✓✓✓ lump-sum
At the age of 42, Steve purchased a fixed deferred annuity from Mega
Mutual Life with a single premium deposit of $10,000. The declared
interest rate on Steve's contract when it was issued was 5 percent, and
the contract guarantees a minimum rate of 3 percent. The initial declared
rate is payable for two years; the renewal rate for year three and later is
subject to change. How much interest will be credited to Steve's contract
at the end of year one? Ans✓✓✓ $500
At the time he purchased his variable annuity, Ahmed directed $5,000 of
his premium into Subaccount A when the unit value was $10. A year
later, the unit value had increased to $15. Assuming he made no
additional premium deposits, what is the value of Ahmed's investment in
Subaccount A now? Ans✓✓✓ $7,500
At what point are a nonqualified annuity's earnings subject to income
tax? Ans✓✓✓ when they are withdrawn from the contract
At what point does the beneficiary to an annuity acquire rights in the
contract? Ans✓✓✓ (Wrong) upon contract issue and throughout the life
of the contract, until the death of the contract owner or annuitant
, Brad is a registered representative with a broker-dealer and is licensed to
sell fixed and variable annuities, as well as mutual funds. How can Brad
comply with the best interest requirements under the NAIC's annuity
model regulation? Ans✓✓✓ by complying with applicable SEC and
FINRA rules pertaining to best interest obligations and supervision of
annuity sales
Darcy owns an indexed annuity. The index that supports her annuity was
at 1000 when the contract's interest crediting period began and 1200
when the crediting period ended. What is the index increase? Ans✓✓✓
20 percent
For an indexed annuity, what is credited to the contract at the end of
each interest crediting term? Ans✓✓✓ (Wrong) the index interest rate
For most indexed annuities, what is the specified floor? Ans✓✓✓ 0
percent
For what primary reason must Annuity Producer Gene collect
information and create a consumer profile? Ans✓✓✓ so that Gene can
evaluate the customer's needs and objectives and analyze annuity
products that will best serve these needs and objectives
For what reason would an individual choose a variable annuity over a
fixed annuity? Ans✓✓✓ for the potential to earn greater contract
growth
Standards Exam WebCE questions with accurate
answers
All of the following are common modal annuitization payout options
EXCEPT: Ans✓✓✓ lump-sum
At the age of 42, Steve purchased a fixed deferred annuity from Mega
Mutual Life with a single premium deposit of $10,000. The declared
interest rate on Steve's contract when it was issued was 5 percent, and
the contract guarantees a minimum rate of 3 percent. The initial declared
rate is payable for two years; the renewal rate for year three and later is
subject to change. How much interest will be credited to Steve's contract
at the end of year one? Ans✓✓✓ $500
At the time he purchased his variable annuity, Ahmed directed $5,000 of
his premium into Subaccount A when the unit value was $10. A year
later, the unit value had increased to $15. Assuming he made no
additional premium deposits, what is the value of Ahmed's investment in
Subaccount A now? Ans✓✓✓ $7,500
At what point are a nonqualified annuity's earnings subject to income
tax? Ans✓✓✓ when they are withdrawn from the contract
At what point does the beneficiary to an annuity acquire rights in the
contract? Ans✓✓✓ (Wrong) upon contract issue and throughout the life
of the contract, until the death of the contract owner or annuitant
, Brad is a registered representative with a broker-dealer and is licensed to
sell fixed and variable annuities, as well as mutual funds. How can Brad
comply with the best interest requirements under the NAIC's annuity
model regulation? Ans✓✓✓ by complying with applicable SEC and
FINRA rules pertaining to best interest obligations and supervision of
annuity sales
Darcy owns an indexed annuity. The index that supports her annuity was
at 1000 when the contract's interest crediting period began and 1200
when the crediting period ended. What is the index increase? Ans✓✓✓
20 percent
For an indexed annuity, what is credited to the contract at the end of
each interest crediting term? Ans✓✓✓ (Wrong) the index interest rate
For most indexed annuities, what is the specified floor? Ans✓✓✓ 0
percent
For what primary reason must Annuity Producer Gene collect
information and create a consumer profile? Ans✓✓✓ so that Gene can
evaluate the customer's needs and objectives and analyze annuity
products that will best serve these needs and objectives
For what reason would an individual choose a variable annuity over a
fixed annuity? Ans✓✓✓ for the potential to earn greater contract
growth
