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Description
Annuities are a unique type of investment vehicle that can help clients accumulate tax deferred funds for the future and then distribute those funds systematically over a set period of time. Advisors and agents must ensure that annuities are structured properly with regard to who is named owner, annuitant, and beneficiary to ensure that client’s financial objectives are ultimately met. Improper or careless annuity structuring can easily uproot a client’s financial plans and strategies.
This course provides a comprehensive overview to the importance of the proper structuring of an annuity contract. It covers the unique features of annuities that may be affected by contract structure, and details the differences between simple and complex structures and owner driven vs. annuitant driven contracts. The effects of an annuity’s structure on a contracts death benefit are explored, as are common mishaps that may occur if annuities are not structured properly. The last section of the course will examine certain provisions of the Amended NAIC Model 275, Suitability in Annuity Transactions.
Learning Objectives
• Identify the four parties to an annuity contract;
• Demonstrate an understanding of the core annuity features that may be affected by annuity contract structure;
• Relate to the elements that affect annuity structuring, including the designation of the parties to the contract; whether the designation of the contract's parties produces a simple or complex structure; whether the contract is owner-driven or annuitant-driven; and the contract's provision for a death benefit and when it is payable;
• Distinguish the factors to consider before recommending annuity ownership by a trust
• Identify the Sections in the Internal Revenue (IRC) that affect the taxation of an annuity contract and the tax consequences that may result from improper annuity contract structure for both a qualified and nonqualified annuity contracts;
• Demonstrate an understanding of a proper IRC Section 1035 exchange;
• Demonstrate an understanding of the effect of annuity structure and design on the payment of death benefits; and
• Describe the new provisions of the amended NAIC Model 275, Suitability in Annuity Transactions