Ohio Life & Health Insurance Prelicensing Online Course Unit Annuities, Variable Products, and Federal Tax Considerations

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Ohio Life & Health Insurance Prelicensing Online Course Unit 6. 6.0 Annuities, Variable Products, and Federal Tax Considerations"

Transcription

1 Ohio Life & Health Insurance Prelicensing Online Course Unit Annuities, Variable Products, and Federal Tax Considerations 6.1 Annuities Key Facts 1. Annuities are, in one way, the opposite of Life Insurance: Life Insurance creates an estate, and annuities systematically liquidate an amount of money over a period of time. 2. There are four parties to an annuity; insurer, owner, annuitant, and beneficiary. 3. Annuity contracts must contain nonforfeiture provisions for example, cash or a paid-up annuity. 4. Annuities grow tax-deferred during the accumulation phase. 5. Withdrawals are taken from the interest first and then the principal (LIFO). 6. Annuities owned by corporations do not qualify for tax-deferral during the accumulation phase 7. The accumulation period is during the pay-in phase, whereas the annuity period is the pay-out phase 8. An SPIA is purchased with one payment and the payout begins usually within 30 days. 9. An FPDA is purchased with periodic payments and the pay-out phase is deferred until a later time. 10. When buying an FPDA, Ohio requires a form to be signed by the owner stating that it has been disclosed that the payout will begin at some point in the future. 11. Surrender charges are assessed by an insurer if withdrawals are taken within the early years of the annuity. After a period of time (for example, eight years), there are no further surrender charges. 12. A Joint Annuity pays benefits until the first dies. 13. A Joint and Survivorship Life Annuity pays until the second dies. 14. Annuities are usually set up to pay for life. You cannot outlive the income from a Life annuity. 15. Fixed Annuities guarantee a fixed rate of return and are backed by the Guaranty Fund. The assets are in the company s general account. 16. An Equity Indexed Annuity has the assets linked to the S&P 500 Index, with a minimum guarantee of principal and a modest minimum interest rate. 17. Market Value Annuities pay a specific interest rate to maturity, and pay payout more or less if surrendered prior to maturity depending upon the current interest rate. 18. Personal uses for annuities include: IRAs, retirement income, education funds, lump-sum law suits, and lottery winnings. 19. If you die during the Accumulation Period of an annuity, the account value will be paid to your beneficiary or to your estate. 20. A Life Income Annuity (Straight or Pure Life Annuity) has no beneficiary, and is the most risky. 21. A Refund Annuity has the least amount of risk. 22. A period certain feature has a guaranteed minimum time frame when payments are guaranteed. For example, a 10-Year Certain guarantees that 120 monthly payments will be paid to someone. 23. The premium for a $100,000 Immediate Annuity is $100,000, regardless of the client s age, health, sex, etc. It is the pay out that depends on these factors. 24. Group Annuity benefits may be adjusted by the insurance company if it finds that the annuitant Ohio L & H Insurance Prelicensing Online Course Page 1 of 6

2 has misstated sex, age, length of service, salary, or any other fact determining the amount of benefits to be paid out. 25. Variable Annuities are often used in small pension plans such as an SEP. 26. Most annuities are used for retirement purposes. 27. Annuity tables are different than mortality tables since there is no insurance protection. 28. Annuities are often used as an alternative to Life Insurance settlement options. 29. When a partial surrender occurs from an annuity, the interest portion is received first (LIFO), and is taxable. After that, the principle is taken. There may also be a 10% penalty if the annuitant is under 59½. 30. At the annuitization of an annuity, the proceeds are a combination of tax-free and taxable money. The tax-free portion is calculated by dividing the amount that is expected to be received over a lifetime divided into the amount that was paid over the life of the annuity. This is called the annuity exclusion ratio. 31. Upon surrender, the portion received that exceeds the amount paid in (cost basis), is taxable at ordinary income rates. 32. A Bailout Annuity contract states that if the interest rate drops at a renewal date more than a specified percentage, the owner has the right to cash-in the annuity and not pay a surrender charge. Taxes still apply to any growth taken at that time. 33. A medical bailout occurs when the owner is confined to a nursing home or is diagnosed with a terminal illness. Ohio L & H Insurance Prelicensing Online Course Page 2 of 6

3 6.2 Variable Products Key Facts 1. The cash value of either an annuity or a Variable Life must be determined no less frequently than monthly. The death benefit of a Variable Life must be determined at least annually. 2. For the test, think of VLI as Variable Whole Life. 3. Variable Life contracts must contain nonforfeiture provisions and provisions for reinstatement. 4. Individual Variable Life Insurance policies that require a payment of a scheduled premium require a 31-day grace period. 5. Variable Life Insurance policies or annuities must contain procedures to be followed to determine the dollar amount of the benefits to be paid. 6. Client funds invested in a Variable Life contract or Variable Annuity must be kept in the insurance company s separate account, which is similar to a mutual fund. 7. Variable products have no guarantees and are not backed by the Guaranty Fund. (You cannot guarantee a variable!) 8. The NASD enforces securities regulations for its members. 9. Variable Life and Variable Universal Life have a 45-day free look starting from the date of the application (Federal law), or ten days from the date of delivery (Ohio law), whichever takes the longest time. 10. The client may skip, reduce, or increase premiums on a Variable Universal Life policy. The policy will not lapse as long as there is enough cash value to cover the next expense deductions. If there is not enough cash to pay the monthly expenses, a 61-day grace period begins upon the mailing of a notice from the company to the policy owner. 11. A Variable Whole Life policy must have a 31-day grace period, since the premiums are required to be paid to keep the policy in force. 12. A Variable Life policy must have a provision permitting the policy owner to reinstate the policy within two years of lapse. 13. Variable Whole Life allows the client to self-direct the investment category, not to choose individual stocks or bonds to be put into the account. 14. Investing in Variable products is considered a hedge against inflation. 15. Variable life agents do not have to be registered with the New York Stock Exchange (NYSE). They do have to be registered with Financial Industry Regulatory Authority (FINRA) and have a securities series 6 or 7 license. 16. The SEC is a federal agency that regulates securities. 17. FINRA is a self regulatory authority and is not a governmental agency. 18. The Securities Act of 1933 requires a prospectus be given to a prospect at the time of the initial discussion about the purchase of a Variable Life/Annuity. 19. The Securities Act of 1934 regulates the actions of sales representatives. 20. The Investment Company Act of 1940 regulates companies who invest money for clients. It controls the separate accounts and the amount of the sales charges. 21. Variable Life (VLI) has a required level premium whereas Variable Universal Life has a flexible premium. 22. Variable Life (VLI) has a guaranteed minimum death benefit it increases/decreases as the value of the account changes. 23. The Variable Universal Life death benefit fluctuates with the gains/losses of the account, however, not on a dollar for dollar basis. Many VULs have a guaranteed death benefit as well. 24. During the annuity (pay out) phase, benefits are based on the earning compared to the Assumed Interest Rate (AIR). Ohio L & H Insurance Prelicensing Online Course Page 3 of 6

4 25. The agent is required to determine the suitability of prospect when selling variable product. 26. A VLI is called a bundled product whereas the VUL is unbundled. 27. A front-load Variable takes the sales charges at the beginning of the contract. 28. A back-load Variable takes a charge when the product is surrendered. The amount is usually determined by how long the product has been in force. 29. The death benefit payment for many annuities is stepped up every few years. 30. Know the three forfeiture options for a Whole Life insurance policy. 31. Know the six settlement options for a Variable Annuity. Also note the differences between the fixed and variable annuity settlement options. 32. Ohio charges a premium tax on annuities and is paid by the company, not the premium payor. Ohio L & H Insurance Prelicensing Online Course Page 4 of 6

5 6.3 Federal Tax Consideration Key Facts 1. Dividends paid by a stock company to stockholders are taxable in the year received. 2. The cash value of a Life policy accumulates income tax free. 3. Cost basis is defined as premiums paid with after-tax dollars. 4. Policy loans do not trigger a taxable event unless the policy is an MEC and there is a gain over the product. 5. Any interest included in any settlement option is taxable. 6. Life Insurance death benefits are included in the deceased s estate if the decedent had any incidents of ownership. 7. If the interest option is selected, the interest paid is subject to taxation. On the test, interest always means taxable income. 8. Premiums paid for individual Life Insurance are not tax deductible, but the proceeds are not taxable if left to a beneficiary. This is true of Key Person insurance as well. 9. A Modified Endowment Contract (MEC) occurs if the values in the policy accumulate faster than a seven-pay Life policy. 10. Modified Endowment Contracts are classified that way for the life of the contract. 11. Modified Endowment Contracts have a 10% penalty for premature distributions if proceeds are taken before age 59½. 12. For both Life Insurance and annuities upon cash surrender, amounts received in excess of premiums paid are income taxable as ordinary income. 13. Upon death, amounts paid to beneficiaries are usually income tax free. 14. Death benefits paid to the beneficiaries are income tax free on Universal Life. 15. Section 1035 allows for the deferral of taxation when a Life policy is exchanged for another Life policy, endowment, or annuity. 16. An endowment can be exchanged for another endowment or annuity and qualify as a An annuity can be exchanged for another annuity and qualify as a 1035 exchange, but must be on the same annuitant. 18. A SEP-IRA (also known as a 408 plan) is an employer-sponsored IRA. 19. IRA contributions may be tax deductible even though the client is an active participant in another qualified plan, if single or married couple income is below a certain level. 20. IRAs may be funded with annuities. 21. Anyone with earned income, including alimony, may contribute to an IRA, up to 100% of earned income or $5,000 in 2012) per year, whichever is LESS. For a married couple filing jointly, the amount is $$10,000 in 2012 per year. 22. IRA contributions may be tax deductible even though the client is an active participant in another qualified plan, but there is a phase out of the deductions at income levels which are adjusted over the years. 23. The IRS limits amounts contributed to qualified plans. 24. Children cannot have an IRA unless they have earned income. 25. IRAs cannot use Life Insurance as a funding instrument. Effective September 2007, new TSA s (403b) plans cannot use Life Insurance as a funding instrument. 26. When money is taken from any qualified plan or an IRA, the proceeds will be fully taxable at ordinary rates since the money paid in was not taxed at that time and all growth was tax deferred. There will be an additional 10% penalty if the money is taken before the age of 59½, except: Ohio L & H Insurance Prelicensing Online Course Page 5 of 6

6 $10,000 for a first-time homebuyer. Death or disability. To pay qualified medical expenses. The 7½% floor does not have to be met. At death, proceeds in excess of the cost basis from an annuity are income taxable to the beneficiary. To pay for qualified higher education expenses. If the employee takes annuitization at the life income levels of distribution, prior to 59½. 27. Roth IRAs allow non-deductible contributions and limits them to $5,000 per-year in 2012 for an individual, and $10,000 in 2012 for a married couple filing a joint return. 28. Proceeds coming from a Roth IRA are tax free if the account has been maintained at least five years and any of these events applies: $10,000 for a first-time homebuyer. Qualified higher education expenses. Death or disability. To pay qualified medical expenses. The 7½% floor does not have to be met. Owner is 59½ or older. 29. A rollover can be made once in a 12-month period and must be completed within a 60-day period. 30. Distributions from a qualified pension or profit sharing plan are subject to a 20% withholding, if the money is given to the individual. 31. The 20% withholding can be avoided if the distribution is sent by a direct transfer from the former employer to the insurance company that issues the annuity as an IRA rollover. 32. If 100% of the funds are not rolled over, the amount not rolled over is subject to tax and, if done before age 59½, is subject to the 10% penalty. 33. IRA assets can be transferred without limit in a 12-month period as long as the owner has the funds transferred directly from one trustee to another trustee. 34. Education IRA (Coverdell Education Savings Account) has a $2,000 per-year limit on contributions and the growth is tax deferred. The money can be taken to pay eligible education expenses. 35. To be a qualified plan, a plan must meet ERISA standards. Money paid into such plans is put in with pre-tax dollars, and grows tax-deferred until taken. 36. A 403(b) Tax Sheltered Annuity (TSA) is for employees of non-profits companies, churches, and schoolteachers. The money is taken from the paycheck as a salary reduction program. 37. A 457 plan is similar to a 403(b) plan, but is for public employees such as state workers, police, and firefighters. 38. Vesting means the employee has met the requirements allowing full ownership of all employer contributions. 39. A Defined Benefit plan states how much will be paid to the retired employee at retirement. 40. A Defined Contribution plan states how much will be contributed to the employees account each year. 41. A 401(k) plan is a salary reduction plan and is a form of a Defined Contribution plan. 42. The catch-up provision for anyone age 50 or over allows that an additional $1,000 can be contributed to an IRA and a Roth-IRA each year. 43. The catch-up provision for 403(b) and 401(k) plans allows anyone age 50 or over to contribute an additional $5,000 per year. Ohio L & H Insurance Prelicensing Online Course Page 6 of 6

LIFE INSURANCE KEY FACTS

LIFE INSURANCE KEY FACTS GENERAL INSURANCE CONCEPTS LIFE INSURANCE KEY FACTS A condition that could result in a loss is known as an EXPOSURE. An insurer is responsible for all acts of their agents as long as the agent operates

More information

Annuity Principles and Concepts Session Five Lesson Two. Annuity (Benefit) Payment Options

Annuity Principles and Concepts Session Five Lesson Two. Annuity (Benefit) Payment Options Annuity Principles and Concepts Session Five Lesson Two Annuity (Benefit) Payment Options Life Contingency Options - How Income Payments Can Be Made To The Annuitant. Pure Life versus Life with Guaranteed

More information

Chapter 19 Retirement Products: Annuities and Individual Retirement Accounts

Chapter 19 Retirement Products: Annuities and Individual Retirement Accounts Chapter 19 Retirement Products: Annuities and Individual Retirement Accounts Overview Thus far we have examined life insurance in great detail. Life insurance companies also market a product that addresses

More information

SHENANDOAH LIFE ANNUITIES

SHENANDOAH LIFE ANNUITIES ANNUITIES AGENT GUIDE SHENANDOAH LIFE ANNUITIES FOR AGENT USE ONLY This piece is not intended to create public interest in an insurance product, an insurer, or an agent. SHENANDOAH LIFE ANNUITIES For

More information

CHAPTER 10 ANNUITIES

CHAPTER 10 ANNUITIES CHAPTER 10 ANNUITIES are contracts sold by life insurance companies that pay monthly, quarterly, semiannual, or annual income benefits for the life of a person (the annuitant), for the lives of two or

More information

Nonqualified annuities can be classified in a number of ways:

Nonqualified annuities can be classified in a number of ways: The term annuity refers to any situation where principal and interest are paid out in a series of regular payments. A nonqualified annuity, generally, is an annuity purchased by an individual from a life

More information

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES BUYER S GUIDE TO FIXED DEFERRED ANNUITIES Prepared by the National Association of Insurance Commissioners The National Association of Insurance Commissioners is an association of state insurance regulatory

More information

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES. The face page of the Fixed Deferred Annuity Buyer s Guide shall read as follows:

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES. The face page of the Fixed Deferred Annuity Buyer s Guide shall read as follows: BUYER S GUIDE TO FIXED DEFERRED ANNUITIES The face page of the Fixed Deferred Annuity Buyer s Guide shall read as follows: Prepared by the National Association of Insurance Commissioners The National Association

More information

Chapter 14. Agenda. Individual Annuities. Annuities and Individual Retirement Accounts

Chapter 14. Agenda. Individual Annuities. Annuities and Individual Retirement Accounts Chapter 14 Annuities and Individual Retirement Accounts Agenda 2 Individual Annuities Types of Annuities Taxation of Individual Annuities Individual Retirement Accounts Individual Annuities 3 An annuity

More information

Fixed Deferred Annuities

Fixed Deferred Annuities Buyer s Guide to: Fixed Deferred Annuities National Association of Insurance Commissioners 2301 McGee St Suite 800 Kansas City, MO 64108-2604 (816) 842-3600 1999, 2007 National Association of Insurance

More information

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES BUYER S GUIDE TO FIXED DEFERRED ANNUITIES IT IS IMPORTANT that you understand the differences among various annuities so you can choose the kind that best fits your needs. This guide focuses on fixed deferred

More information

Variable Annuities. Introduction. Settlement Options. Methods of Buying Annuities. Tracking Separate Accounts. Suitability. Tax Deferred Annuities

Variable Annuities. Introduction. Settlement Options. Methods of Buying Annuities. Tracking Separate Accounts. Suitability. Tax Deferred Annuities Variable Annuities Introduction Settlement Options Methods of Buying Annuities Tracking Separate Accounts Suitability Tax Deferred Annuities Using this study guide. This study guide is intended for use

More information

Annuities. Introduction 2. What is an Annuity?... 2. How do they work?... 3. Types of Annuities... 4. Fixed vs. Variable annuities...

Annuities. Introduction 2. What is an Annuity?... 2. How do they work?... 3. Types of Annuities... 4. Fixed vs. Variable annuities... An Insider s Guide to Annuities Whatever your picture of retirement, the best way to get there and enjoy it once you ve arrived is with a focused, thoughtful plan. Introduction 2 What is an Annuity?...

More information

Roth and Other IRA Plans Final Exam

Roth and Other IRA Plans Final Exam Roth and Other IRA Plans Final Exam 1. The traditional or regular IRA has been available in some form since: a. 1958 b. 1974 c. 1990 d. 1997 2. Financial experts recommend saving at least of income each

More information

FREE LIFE INSURANCE PRACTICE EXAM

FREE LIFE INSURANCE PRACTICE EXAM FREE LIFE INSURANCE PRACTICE EXAM We offer an online video L&H exam prep course that includes over 10 hours of instruction. Our full pdf study manual and over 600 questions are also included. Please go

More information

ohio shopper s guide series Annuity Contracts

ohio shopper s guide series Annuity Contracts ohio shopper s guide series Annuity Contracts This guide: Explains annuity contracts and their purpose Describesvarious contracts being sold today Details your choices for paying premiums and receiving

More information

Your pension benefit options

Your pension benefit options 2 Your pension benefit options Traditional pension plans generally provide the option of a lump-sum payment or a fixed monthly payment for life through an annuity. The fixed monthly payment amount is usually

More information

Understanding Annuities: A Lesson in Annuities

Understanding Annuities: A Lesson in Annuities Understanding Annuities: A Lesson in Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income that you

More information

Fixed Deferred Annuities

Fixed Deferred Annuities Buyer s Guide to: Fixed Deferred Annuities with Appendix for Equity-Indexed Annuities National Association of Insurance Commissioners 2301 McGee St Suite 800 Kansas City, MO 64108-2604 (816) 842-3600 1999,

More information

Understanding Annuities: A Lesson in Indexed Annuities

Understanding Annuities: A Lesson in Indexed Annuities Understanding Annuities: A Lesson in Indexed Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income that

More information

for producer use only Fixed Annuities

for producer use only Fixed Annuities for producer use only Fixed Annuities M24392 8-2005 August 2005, Mutual of Omaha Insurance Company, publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval

More information

Traditional IRA and Roth IRA

Traditional IRA and Roth IRA Traditional IRA and Roth IRA Plan Today for a Secure Tomorrow lord abbett retirement services Bring an Unwavering Commitment to Your Retirement Plan Founded in 1929, Lord Abbett is an independent, privately

More information

Annuities The Key to a

Annuities The Key to a Annuities The Key to a Secure Retirement 1 Saving for retirement is crucial, and making sure those resources last throughout your lifetime is just as important. Annuities do both helping you save, then

More information

Preparing for Your Retirement: An IRA Review

Preparing for Your Retirement: An IRA Review Preparing for Your Retirement: An IRA Review How much of your earning power will be available for your use when you retire? What will happen to your standard of living when your income ceases at retirement?

More information

Tax-smart ways to save and invest. TIAA-CREF Financial Essentials

Tax-smart ways to save and invest. TIAA-CREF Financial Essentials Tax-smart ways to save and invest TIAA-CREF Financial Essentials Today s agenda: 1. Finding funds for saving 2. Tax law provisions promoting saving 3. TIAA-CREF savings opportunities 4. TIAA-CREF can help

More information

chart retirement plans 8 Retirement plans available to self-employed individuals include:

chart retirement plans 8 Retirement plans available to self-employed individuals include: retirement plans Contributing to retirement plans can provide you with financial security as well as reducing and/or deferring your taxes. However, there are complex rules that govern the type of plans

More information

Table of contents. 2 Federal income tax rates. 12 Required minimum distributions. 4 Child credits. 13 Roths. 5 Taxes: estates, gifts, Social Security

Table of contents. 2 Federal income tax rates. 12 Required minimum distributions. 4 Child credits. 13 Roths. 5 Taxes: estates, gifts, Social Security 2015 Tax Guide Table of contents 2 Federal income tax rates 4 Child credits 5 Taxes: estates, gifts, Social Security 6 Rules on retirement plans 8 Saver s credit 12 Required minimum distributions 13 Roths

More information

ira individual retirement accounts Traditional IRA

ira individual retirement accounts Traditional IRA ira individual retirement accounts Traditional IRA Grow dollars for tomorrow, save on taxes today. A traditional IRA may provide you significant immediate tax savings, and due to the deferral of all taxes

More information

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES WITH APPENDIX FOR EQUITY-INDEXED ANNUITIES

BUYER S GUIDE TO FIXED DEFERRED ANNUITIES WITH APPENDIX FOR EQUITY-INDEXED ANNUITIES BUYER S GUIDE TO FIXED DEFERRED ANNUITIES WITH APPENDIX FOR EQUITY-INDEXED ANNUITIES Prepared by the NAIC National Association of Insurance Commissioners The National Association of Insurance Commissioners

More information

CITI FUND SERVICES, INC. CUSTODIAL ACCOUNT DISCLOSURE STATEMENT. MERK FUNDS Custodial Account Disclosure Statement. Part One: Traditional IRAs

CITI FUND SERVICES, INC. CUSTODIAL ACCOUNT DISCLOSURE STATEMENT. MERK FUNDS Custodial Account Disclosure Statement. Part One: Traditional IRAs MERK FUNDS Custodial Account Disclosure Statement This Custodial Account Disclosure Statement ( Disclosure Statement ) applies to Traditional Individual Retirement Accounts ( IRAs ), Roth IRAs and Coverdell

More information

Part VII Individual Retirement Accounts

Part VII Individual Retirement Accounts Part VII are a retirement planning tool that virtually everyone should consider. The new IRA options also have made selecting an IRA a bit more complicated. IRA Basics The Traditional IRA is an Individual

More information

Please ensure that the Page Scaling option is set to None as shown in the picture below before printing this set of paper flash cards.

Please ensure that the Page Scaling option is set to None as shown in the picture below before printing this set of paper flash cards. Printed Flash Cards Please ensure that the Page Scaling option is set to None as shown in the picture below before printing this set of paper flash cards. Once printed, simply fold each page along the

More information

The Basics of Annuities: Planning for Income Needs

The Basics of Annuities: Planning for Income Needs March 2013 The Basics of Annuities: Planning for Income Needs summary the facts of retirement Earning income once your paychecks stop that is, after your retirement requires preparing for what s to come

More information

The Basics of Annuities: Income Beyond the Paycheck

The Basics of Annuities: Income Beyond the Paycheck The Basics of Annuities: PLANNING FOR INCOME NEEDS TABLE OF CONTENTS Income Beyond the Paycheck...1 The Facts of Retirement...2 What Is an Annuity?...2 What Type of Annuity Is Right for Me?...2 Payment

More information

LIFE ONLY PRODUCER INDIANA EXAMINATION CONTENT OUTLINE *80 QUESTIONS TOTAL **TIME LIMIT 1 hour 20 minutes REVISED 6/28/2011

LIFE ONLY PRODUCER INDIANA EXAMINATION CONTENT OUTLINE *80 QUESTIONS TOTAL **TIME LIMIT 1 hour 20 minutes REVISED 6/28/2011 LIFE ONLY PRODUCER INDIANA EXAMINATION CONTENT OUTLINE *80 QUESTIONS TOTAL **TIME LIMIT 1 hour 20 minutes REVISED 6/28/2011 VII. INSURANCE BASICS (10 QUESTIONS TOTAL) A. The Very Basics (1 QUESTION) 1.

More information

Thrift Savings Plan. Plan Overview. Investment Options. Contribution Limits. Withdrawal Options

Thrift Savings Plan. Plan Overview. Investment Options. Contribution Limits. Withdrawal Options Plan Overview Investment Options Contribution Limits Withdrawal Options (TSP) Contents Investment Options... Life Cycle Funds... TSP Contributions - Tax Treatment... Agency Contributions... Over 50 Catch-up

More information

16. Individual Retirement Accounts

16. Individual Retirement Accounts 16. Individual Retirement Accounts Introduction Through enactment of the Employee Retirement Income Security Act of 1974 (ERISA), Congress established individual retirement accounts (IRAs) to provide workers

More information

Retirement Plans Guide Facts at a glance

Retirement Plans Guide Facts at a glance Retirement Plans Guide Facts at a glance Contents 1 What s Your Plan? 2 Small Business/Employer Retirement Plans 4 IRAs 5 Retirement Plan Distributions 7 Rollovers and Transfers 8 Federal Tax Rates and

More information

The Individual Annuity

The Individual Annuity The Individual Annuity a re s o u rc e i n yo u r r e t i r e m e n t an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live

More information

Consumer s Guide to. Fixed Deferred Annuities

Consumer s Guide to. Fixed Deferred Annuities Consumer s Guide to Fixed Deferred Annuities Louisiana Department of Insurance Jim Donelon, Commissioner CONTENTS What is an Annuity?...3 What are the different kinds of Annuities?...4 How are the interest

More information

Glossary of Annuity Product Terms

Glossary of Annuity Product Terms Glossary of Annuity Product Terms A A-Share Variable Annuities Annuity contracts in which sales charges are incurred at time of investment or premium payment. A-share contracts typically have no surrender

More information

Leaving your employer? Options for your retirement plan

Leaving your employer? Options for your retirement plan Leaving your employer? Options for your retirement plan Contents Evaluating your options 1 The benefits of tax-deferred investing 4 Flexibility offered by an IRA rollover 6 How to get started 9 Evaluating

More information

Variable Annuities 101

Variable Annuities 101 WealthMark Advisory Services Philip Scholler President/CEO 5001 Horizons Drive Suite 201 Columbus, OH 43220 614-824-4352 phil@wealthmarkas.com www.wealthmarkas.com Inside Workbook: What Is a Variable Annuity?

More information

Supplement to IRA Custodial Agreements

Supplement to IRA Custodial Agreements Supplement to IRA Custodial Agreements Effective December 31, 2014, the update below will be made to the American Century Custodial agreements for the following retirement accounts: Traditional IRAs, Roth

More information

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Putting money into an employer s retirement plan or IRA is just the first step toward financial security in retirement. How you

More information

Understanding Annuities

Understanding Annuities Annuities, 06 5/4/05 12:43 PM Page 1 Important Information about Variable Annuities Variable annuities are offered by prospectus, which you can obtain from your financial professional or the insurance

More information

The Individual Annuity

The Individual Annuity The Individual Annuity a resource in your retirement an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years

More information

Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients

Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients Presented by: Arvin D. Pfefer Arvin D. Pfefer & Associates 7301 Mission Road, Suite 241 Prairie Village,

More information

Indexed Annuities. Fixed vs. Indexed Annuities

Indexed Annuities. Fixed vs. Indexed Annuities The term annuity derives from a Latin term meaning annual and generally refers to any circumstance where principal and interest are liquidated through a series of regular payments made over a period of

More information

PERSONAL FINANCE. individual retirement accounts (IRAs)

PERSONAL FINANCE. individual retirement accounts (IRAs) PERSONAL FINANCE individual retirement accounts (IRAs) 1 our mission To lead and inspire actions that improve financial readiness for the military and local community. table of contents The Basics Of IRAs...

More information

TRADITIONAL IRA AND ROTH IRA. Plan Today for a Secure Tomorrow

TRADITIONAL IRA AND ROTH IRA. Plan Today for a Secure Tomorrow TRADITIONAL IRA AND ROTH IRA Plan Today for a Secure Tomorrow INVESTMENT-LED. INVESTOR-FOCUSED. As an investment-led firm, we evaluate every decision from an investment perspective in an effort to achieve

More information

Fixed Annuity Products

Fixed Annuity Products Training Module Fixed Annuity Products Issuer: Western-Southern Life Assurance Company Featuring: Acclaim FI-09-0002 Horizon FI-08-004 MultiRate FI-03-014 Annuity Guide Prepared by the National Association

More information

Peach State Reserves PEACH STATE RESERVES FAQ. Peach State Reserves General Questions

Peach State Reserves PEACH STATE RESERVES FAQ. Peach State Reserves General Questions Peach State Reserves PEACH STATE RESERVES FAQ Peach State Reserves General Questions What is Peach State Reserves The Georgia Retirement Investment Plan? What is a Deferred Compensation/Defined Contribution

More information

Understanding Annuities

Understanding Annuities Understanding Annuities Annuities ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE IFS-A092313 Ed. 01/2005 Letter

More information

How much can I deduct if I am an active participant in a qualified plan?... 2

How much can I deduct if I am an active participant in a qualified plan?... 2 Table of Contents What is an Individual Retirement Account (IRA)?...................................... 1 Who may establish a Traditional IRA?............................................... 1 How much

More information

Annuity Contracts. ohio shopper s guide series 1-800-686-1526

Annuity Contracts. ohio shopper s guide series 1-800-686-1526 ohio shopper s guide series Annuity Contracts This guide: Explains annuity contracts and their purpose Describes various contracts being sold today Details your choices for paying premiums and receiving

More information

1099R BOX DESCRIPTIONS

1099R BOX DESCRIPTIONS For additional details and instructions refer to IRS 1099R Instructions 1 Gross Distribution Enter the total amount of the distribution before income tax or other deductions were withheld. This can include:

More information

INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF ADDITIONAL INFORMATION. FORM N-4 PART B May 2, 2016 TABLE OF CONTENTS

INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF ADDITIONAL INFORMATION. FORM N-4 PART B May 2, 2016 TABLE OF CONTENTS THE VARIABLE ANNUITY LIFE INSURANCE COMPANY SEPARATE ACCOUNT A UNITS OF INTEREST UNDER GROUP AND INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF

More information

Annuities 101. What is an annuity. Type of Annuities. How to get started

Annuities 101. What is an annuity. Type of Annuities. How to get started Annuities 101 What is an annuity Type of Annuities How to get started What is an Annuity? An annuity is a long-term (often 5 years or more), interest-paying contract offered through an insurance company.

More information

Guide to buying annuities

Guide to buying annuities Guide to buying annuities Summary of the key points contained in this disclosure document Before you purchase your annuity contract, make sure that you read and understand this guide. While reading this

More information

RETIREMENT SAVING OPTIONS FOR INDIVIDUALS

RETIREMENT SAVING OPTIONS FOR INDIVIDUALS RETIREMENT SAVING OPTIONS FOR INDIVIDUALS For Traditional, Rollover, SEP or Roth IRA BUFFALO FUNDS We re pleased that you have chosen the Buffalo Funds for your retirement investment. These Funds are professionally

More information

PERSONAL FINANCE. annuities

PERSONAL FINANCE. annuities PERSONAL FINANCE annuities 1 our mission To lead and inspire actions that improve financial readiness for the military and local community. table of contents What You Should Know... 02 Annuity Basics...

More information

Guide to Individual Retirement Accounts. Make a secure retirement yours

Guide to Individual Retirement Accounts. Make a secure retirement yours Guide to Individual Retirement Accounts Make a secure retirement yours Retirement means something different to everyone. Some dream of stopping employment completely and some want to continue working.

More information

SUMMARY REVIEW COLORADO COUNTY OFFICIALS AND EMPLOYEES RETIREMENT ASSOCIATION 457 DEFERRED COMPENSATION PLAN FOR THE

SUMMARY REVIEW COLORADO COUNTY OFFICIALS AND EMPLOYEES RETIREMENT ASSOCIATION 457 DEFERRED COMPENSATION PLAN FOR THE SUMMARY REVIEW FOR THE COLORADO COUNTY OFFICIALS AND EMPLOYEES RETIREMENT ASSOCIATION 457 DEFERRED COMPENSATION PLAN TABLE OF CONTENTS INTRODUCTION... i HIGHLIGHTS... 2 PARTICIPATION... 2 Eligibility to

More information

Understanding Annuities: A Lesson in Variable Annuities

Understanding Annuities: A Lesson in Variable Annuities Understanding Annuities: A Lesson in Variable Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income

More information

Life Insurance PRACTICE EXAM 2

Life Insurance PRACTICE EXAM 2 Life Insurance PRACTICE EXAM 2 Note: Most of the questions in this test concern Ordinary Life insurance. Unless a policy title includes the word "Industrial" or the word "Group," the policy is an Ordinary

More information

The owner is usually the purchaser of the policy. However, the owner may also acquire the policy by gift, sale, exchange, or bequest.

The owner is usually the purchaser of the policy. However, the owner may also acquire the policy by gift, sale, exchange, or bequest. Annuity Ownership Considerations What is an annuity owner? What are the owner's rights? Who should be the owner? What if the owner dies? Is the annuity includable in the owner's estate? What risks does

More information

YOUR GUIDE TO YOUR UNITED AMERICAN IRA

YOUR GUIDE TO YOUR UNITED AMERICAN IRA 3700 S. STONEBRIDGE DRIVE POST OFFICE BOX 8080 MCKINNEY, TEXAS 75070-8080 YOUR GUIDE TO YOUR UNITED AMERICAN IRA PLAN CODE: E91 UASA DF PC E91 UAI1422 1209 Your Guide to Your United American IRA This Guide

More information

Important Information about your Annuity Investment

Important Information about your Annuity Investment Robert W. Baird & Co. Incorporated Important Information about your Annuity Investment What is an Annuity Contract? An annuity is a contract between you and an insurance company, under which you make a

More information

QUICK NOTES SUPPLEMENTAL STUDY GUIDE NEW JERSEY

QUICK NOTES SUPPLEMENTAL STUDY GUIDE NEW JERSEY QUICK NOTES SUPPLEMENTAL STUDY GUIDE NEW JERSEY A REVIEW SUPPLEMENT FOR THE NEW JERSEY LIFE, ACCIDENT & HEALTH STATE LICENSING EXAM (April 2016 Edition) What is Insurance Schools Quick Notes Supplemental

More information

IRAs. Investing in Your Future. Retirement Plans

IRAs. Investing in Your Future. Retirement Plans IRAs Investing in Your Future Retirement Plans About Stifel Nicolaus Stifel Nicolaus is a full-service Investment firm with a distinguished history of providing securities brokerage, investment banking,

More information

No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency

No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency Understanding annuities An Overview for Your Retirement No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency 2/15 13096-15A Contents Get Ready

More information

TRADITIONAL IRA DISCLOSURE STATEMENT

TRADITIONAL IRA DISCLOSURE STATEMENT TRADITIONAL IRA DISCLOSURE STATEMENT TABLE OF CONTENTS REVOCATION OF ACCOUNT... 1 STATUTORY REQUIREMENTS... 1 (1) Qualification Requirements... 1 (2) Required Distribution Rules... 1 (3) Approved Form....

More information

Participant Name (First) (Middle Initial) (Last) Social Security Number I.D. Number. Participant Address (Street) City State ZIP Code + 4

Participant Name (First) (Middle Initial) (Last) Social Security Number I.D. Number. Participant Address (Street) City State ZIP Code + 4 Mailing Address: Des Moines, IA 50392-0001 Principal Life Insurance Company Early Withdrawal of Benefits Without Guaranteed Accounts No Spousal Consent Needed CTD00603 Complete this form to withdraw part

More information

NORTHEAST INVESTORS TRUST. 125 High Street Boston, MA 02110 Telephone: 800-225-6704

NORTHEAST INVESTORS TRUST. 125 High Street Boston, MA 02110 Telephone: 800-225-6704 NORTHEAST INVESTORS TRUST traditional IRA INVESTOR S KIT 125 High Street Boston, MA 02110 Telephone: 800-225-6704 Table of Contents NORTHEAST INVESTORS TRUST TRADITIONAL IRA DISCLOSURE STATEMENT...1 INTRODUCTION...1

More information

Employee Stock Ownership Plan (ESOP)

Employee Stock Ownership Plan (ESOP) Employee Stock Ownership Plan (ESOP) The basics: The ESOP is essentially a stock bonus plan in which employer stock may be used for contributions. How It Works Employer contributes company stock or cash

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan savings in the Plan and contains important information you will

More information

Your Guide to Fixed Annuities

Your Guide to Fixed Annuities Your Guide to Fixed Annuities A Smart Choice for Safety Conscious Individuals Seeking Financial Security Protect Your Future Whether you re preparing for retirement or already enjoying retirement, a fixed

More information

To Roth or Not Revised September 2013

To Roth or Not Revised September 2013 Introduction To Roth or Not Revised September 2013 Tax law allows all taxpayers (without income limitation) to convert all or part of their traditional IRAs to Roth IRAs. Even though conversion to Roth

More information

Cash or Deferred 401(k) Plan

Cash or Deferred 401(k) Plan The Basics Any profit sharing or stock bonus plan that meets certain participation requirements of IRC Sec. 40(k) can be a cash or deferred plan. An employee can agree to a salary reduction or to defer

More information

Roth 403(b) Contribution Option

Roth 403(b) Contribution Option Roth 403(b) Contribution Option Frequently Asked Questions George Mason University offers a Roth 403(b) contribution option under the George Mason University Tax Deferred Savings Plan (the Plan ). The

More information

The individual. A Resource for Your Retirement

The individual. A Resource for Your Retirement Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years or more in retirement. Finding a way to make savings last over such a long

More information

SUMMARY PLAN DESCRIPTION

SUMMARY PLAN DESCRIPTION Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 Rev. 11/08 Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION...iii DEFINITIONS...1 Beneficiary...1 Catch-up

More information

SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS

SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS SPECIAL TAX NOTICE FOR PARTICIPARTS RECEIVING PLAN BENEFIT PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan

More information

IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you?

IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you? IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you? Now more than ever, an Individual Retirement Account (IRA) may help provide

More information

Annuities Why NOT? 062308 by Monica Haven, E.A.

Annuities Why NOT? 062308 by Monica Haven, E.A. Annuities Why NOT? 062308 by Monica Haven, E.A. Once considered the panacea for the ailing investment portfolio, annuities have been hobbled by the galloping changes of the Tax Code. Fixed, variable, index,

More information

WHO CAN CONTRIBUTE TO A ROTH IRA?

WHO CAN CONTRIBUTE TO A ROTH IRA? { } ROTH IRAs 1 WHO CAN CONTRIBUTE TO A ROTH IRA? Any taxpayer who has compensation, regardless of age, can contribute to a ROTH IRA. Compensation is defined as wages, salaries, bonuses, commissions, tips,

More information

Six Strategies to Help Retirees Reduce Taxes and Preserve Their Assets

Six Strategies to Help Retirees Reduce Taxes and Preserve Their Assets Six Strategies to Help Retirees Reduce Taxes and Preserve Their Assets Provided to you by: H. Howard Rigg CFS,CRPS,RFC,CASL Six Strategies to Help Retirees Reduce Taxes and Preserve Their Assets Written

More information

A variable annuity is a type of annuity in which the contract owner directs the overall investment strategy for the funds placed in the contract.

A variable annuity is a type of annuity in which the contract owner directs the overall investment strategy for the funds placed in the contract. The term annuity derives from a Latin term meaning annual and generally refers to any circumstance where principal and interest are liquidated through a series of regular payments made over a period of

More information

A variable annuity is a type of annuity in which the contract owner directs the overall investment strategy for the funds placed in the contract.

A variable annuity is a type of annuity in which the contract owner directs the overall investment strategy for the funds placed in the contract. The term annuity derives from a Latin term meaning annual and generally refers to any circumstance where principal and interest are liquidated through a series of regular payments made over a period of

More information

Annuities. Fixed Annuity: An annuity which the amount paid out is fixed sum and is usually guaranteed.

Annuities. Fixed Annuity: An annuity which the amount paid out is fixed sum and is usually guaranteed. Annuities Fixed Annuity: An annuity which the amount paid out is fixed sum and is usually guaranteed. Loads: The fees or charges paid when you purchase an annuity. Includes sales commissions. Author: Douglas

More information

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION 1. EMPLOYEE INFORMATION (Please print) COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION Name: Address: Social Security No.: Birth Date: City: State: Zip: Termination

More information

Learning Objectives 26. What Is Insurance? 3. Coverage Concepts 8. Types of Insurance 10. Types of Insurers 11. Introduction 26

Learning Objectives 26. What Is Insurance? 3. Coverage Concepts 8. Types of Insurance 10. Types of Insurers 11. Introduction 26 Contents u n i t 1 Introduction to Insurance 1 Introduction 2 Learning Objectives 2 What Is Insurance? 3 Risk 4 Coverage Concepts 8 Types of Insurance 10 Types of Insurers 11 Domicile and Authorization

More information

Your retirement income. Managing your retirement plan assets

Your retirement income. Managing your retirement plan assets Your retirement income Managing your retirement plan assets Taking control of your retirement assets If you are changing jobs, displaced, or retiring, you may find yourself facing one of the most important

More information

Qualified Retirement Plan

Qualified Retirement Plan Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 02/13 This page intentionally left blank. Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION... iii DEFINITIONS...

More information

Individual retirement arrangements (IRAs) are one of the most viable answers to the question of how to ensure a secure retirement.

Individual retirement arrangements (IRAs) are one of the most viable answers to the question of how to ensure a secure retirement. Learn About IRAs Traditional IRAs How can a Traditional IRA help me save for retirement? Who may contribute, and how much? What is a spousal contribution? What is a SEP Contribution? What is an IRA catch-up

More information

REVIEWING YOUR TIAA-CREF INCOME CHOICES A GUIDE TO YOUR PAYMENT OPTIONS

REVIEWING YOUR TIAA-CREF INCOME CHOICES A GUIDE TO YOUR PAYMENT OPTIONS REVIEWING YOUR TIAA-CREF INCOME CHOICES A GUIDE TO YOUR PAYMENT OPTIONS FLEXIBILITY & CHOICE TIAA-CREF UNDERSTANDS YOUR FINANCIAL PRIORITIES can change over time, which is why we offer you a wide range

More information

Understanding Annuities

Understanding Annuities This guide: Explains the different types of annuity contracts Describes the various contractual features Discusses how to shop for an annuity State of Wisconsin Office of the Commissioner of Insurance

More information

ANNUITY PRODUCTS TRAINING COURSE

ANNUITY PRODUCTS TRAINING COURSE ANNUITY PRODUCTS TRAINING COURSE Single Premium Immediate Annuity The Sagicor Gold Series Single Premium Immediate Annuity (SPIA) turns a single lump-sum deposit into a reliable and consistent income stream.

More information