Hecm test 5 Questions and Answers|
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annuity definition An annuity is a contract between a buyer and an insurance company.
The insurer agrees to make periodic payments immediately or at some future date in exchange
for premiums. For instance, a client may agree to invest $100,000 in exchange for a promise of
$500 per month for the client's lifetime. In a deferred annuity, the monthly payments would not
begin until a specified future date; in an immediate annuity, the payments begin right away.
Deferred annuities are often inappropriate for older borrowers who may not gain any benefits
from the investment if they have to wait 10 or 15 years
fixed annuities There are generally two types of annuities: fixed and variable. Fixed
annuities are funds typically invested in bonds
Advisors typically discourage older investors from variable annuities because they are designed
for long-term growth
variable annuities variable annuities are invested in stocks
extras for someone who is considering an annuity Clients may be interested in an annuity
because they can continue to receive payments even if they do not remain in their home.
annuities can have high surrender charges (penalties for early withdrawal of funds) or may put
the client's funds entirely out of reach for a period of time.
.
If clients express interest in purchasing an annuity, a counselor must take extra steps to inform
the clients that there are ways to obtain an annuity other than through a reverse mortgage. The
counselor must also point out the implications of purchasing an annuity through a reverse
mortgage.
The Federal Truth-in-Lending Act (TILA) recognizes the unique difficulty of evaluating the total
cost of a reverse mortgage that is used to purchase an annuity. Counselors must supplement
specialized TILA cost disclosures for these two-part transactions by giving clients who are
considering annuities the document in Attachment C.9 of this protocol
, supplemental security income ssi Supplemental Security Income (SSI) provides monthly
cash payments to qualifying lowincome persons age 65 and over. To be eligible in 2008, an
applicant's liquid resources (cash and savings) could not be greater than $2,000 ($3,000 for a
couple), not including the value of a home or car. Monthly "countable income" could not be
greater than $637 for a single person and $956 for a couple. Some earned income can be
excluded from the countable total. Some states also provide additional supplements to the
federal SSI benefit. See www.ssa.gov/ssi for current details
aaa area agencies on aging Area Agencies on Aging (AAAs) coordinate the delivery of a
variety of services to meet the needs of the older population, including information and
referral, outreach, transportation, inhome care, legal and protective services, counseling,
socialization, recreation, and education. Most AAAs are not in the direct service business
meaning that they contract out this work to local agencies who provide such services to the
older population. The local agencies may be a county Department of Aging, or a nonprofit
Council on Aging, or may go by other names. AAA and local agency contact information can be
obtained from the Eldercare Locator available at www.eldercare.gov or by telephone at (800)
677-1116
Fraud and Coercion Although fraud and coercion are not limited to clients with impaired
ability to understand and make decisions, cognitively impaired clients are more vulnerable to
such exploitation. Counselors should be especially sensitive to the possibility that such a client is
being pushed into an inappropriate choice by others who do not have the client's best interests
at heart. If the counselor feels that: 1) the client was coerced into pursuing a reverse mortgage,
or 2) the client may be a victim of elder abuse or exploitation, the counselor should advise
clients that each state has an elder abuse hotline and provide them with the hotline phone
number in the client's state. Hotline numbers can be found at
http://www.ncea.aoa.gov/NCEAroot/Main_Site/Find_Help/Help_Hotline.aspx
If they don't answer 5 out of 10 questions correctly The counselor will offer one or more
of the following in order to answer the 5 out of 10 questions correctly.
Schedule an additional session to allow more time to review important topics and possibly at a
different time of day,
Help the client to arrange a face-to-face counseling session with the original counselor or
another counselor
Ask the client if there is someone else he or she could bring with them to or could join in a
phone counseling session and schedule another session to include this person.
Latest Update
annuity definition An annuity is a contract between a buyer and an insurance company.
The insurer agrees to make periodic payments immediately or at some future date in exchange
for premiums. For instance, a client may agree to invest $100,000 in exchange for a promise of
$500 per month for the client's lifetime. In a deferred annuity, the monthly payments would not
begin until a specified future date; in an immediate annuity, the payments begin right away.
Deferred annuities are often inappropriate for older borrowers who may not gain any benefits
from the investment if they have to wait 10 or 15 years
fixed annuities There are generally two types of annuities: fixed and variable. Fixed
annuities are funds typically invested in bonds
Advisors typically discourage older investors from variable annuities because they are designed
for long-term growth
variable annuities variable annuities are invested in stocks
extras for someone who is considering an annuity Clients may be interested in an annuity
because they can continue to receive payments even if they do not remain in their home.
annuities can have high surrender charges (penalties for early withdrawal of funds) or may put
the client's funds entirely out of reach for a period of time.
.
If clients express interest in purchasing an annuity, a counselor must take extra steps to inform
the clients that there are ways to obtain an annuity other than through a reverse mortgage. The
counselor must also point out the implications of purchasing an annuity through a reverse
mortgage.
The Federal Truth-in-Lending Act (TILA) recognizes the unique difficulty of evaluating the total
cost of a reverse mortgage that is used to purchase an annuity. Counselors must supplement
specialized TILA cost disclosures for these two-part transactions by giving clients who are
considering annuities the document in Attachment C.9 of this protocol
, supplemental security income ssi Supplemental Security Income (SSI) provides monthly
cash payments to qualifying lowincome persons age 65 and over. To be eligible in 2008, an
applicant's liquid resources (cash and savings) could not be greater than $2,000 ($3,000 for a
couple), not including the value of a home or car. Monthly "countable income" could not be
greater than $637 for a single person and $956 for a couple. Some earned income can be
excluded from the countable total. Some states also provide additional supplements to the
federal SSI benefit. See www.ssa.gov/ssi for current details
aaa area agencies on aging Area Agencies on Aging (AAAs) coordinate the delivery of a
variety of services to meet the needs of the older population, including information and
referral, outreach, transportation, inhome care, legal and protective services, counseling,
socialization, recreation, and education. Most AAAs are not in the direct service business
meaning that they contract out this work to local agencies who provide such services to the
older population. The local agencies may be a county Department of Aging, or a nonprofit
Council on Aging, or may go by other names. AAA and local agency contact information can be
obtained from the Eldercare Locator available at www.eldercare.gov or by telephone at (800)
677-1116
Fraud and Coercion Although fraud and coercion are not limited to clients with impaired
ability to understand and make decisions, cognitively impaired clients are more vulnerable to
such exploitation. Counselors should be especially sensitive to the possibility that such a client is
being pushed into an inappropriate choice by others who do not have the client's best interests
at heart. If the counselor feels that: 1) the client was coerced into pursuing a reverse mortgage,
or 2) the client may be a victim of elder abuse or exploitation, the counselor should advise
clients that each state has an elder abuse hotline and provide them with the hotline phone
number in the client's state. Hotline numbers can be found at
http://www.ncea.aoa.gov/NCEAroot/Main_Site/Find_Help/Help_Hotline.aspx
If they don't answer 5 out of 10 questions correctly The counselor will offer one or more
of the following in order to answer the 5 out of 10 questions correctly.
Schedule an additional session to allow more time to review important topics and possibly at a
different time of day,
Help the client to arrange a face-to-face counseling session with the original counselor or
another counselor
Ask the client if there is someone else he or she could bring with them to or could join in a
phone counseling session and schedule another session to include this person.
