ANNUITY WEBCE ACTUAL 27 QUESTIONS

ANNUITY – WEBCE (ACTUAL / ) 27 QUESTIONS

AND 100% VERIFIED ANSWERS

Annuitization is Accumulated values are converted into a stream of periodic income payments.

How often can payments of annuities be paid out?A specified term of years, for life, or a combination of the two.

What is Premium Tax in relation to the annuity?A number of states impose a tax on annuity premiums.

What does the Mortality and Expense (M&E) charge?Assessed against the values of the separate subaccounts and is deducted before accumulation unit values are calculated.It helps ensure that the insurer can meet its contractual obligations for annualized income payments and a minimum death benefit.

The cost of a variable annuity's death benefit and annuity charge plus related insurer costs (such as agent commissions and overhead)

Which expense of a Variable Annuity, which is the most criticized? And why? 1 / 2

The Mortality and Expense.

What fees are built into the Fixed Annuity Contract's interest rate?The Commissions it pays to its producers and distributors, its operational costs and reserve requirements, and generates profits.

1) Commissions 2) Operational costs 3) Profits

What are the annuity drawbacks?1- Lack of Liquidity

2- Contract Surrender Charges

3- Tax Penalties for Early Withdrawals (Withdrawals taken before age 59½ may be subject to a 10 percent IRS penalty tax unless an exception applies.)

4- Fees and Charges that may be Higher than those associated with other Investments (Annual fee to manage/administer it. Typically .3% of Value of Annuity or Flat Fee of $25/Year)

5- No Capital Gains Treatment of Distributed Funds (Taxed as Ordinary Income)

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