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Description
This course examines the annuity concept and explains what an annuity is and how it works:
-The mechanics of the accumulation and payout phases of an annuity, including sample calculations
-Settlement options and their appropriate uses
-Annuity taxation: Federal income tax treatment of premature withdrawals; lump-sum distributions; and periodic payments.
-A comparison of the different annuity contracts available with respect to client suitability.
Variable and fixed annuities are discussed in terms of single vs. periodic premium, immediate vs. deferred, qualified vs. non-qualified, and settlement options.
Learning Objectives
1. Describe a typical annuity buyer and the principal reasons individuals buy annuity contracts
2. List the characteristics of annuities and the benefits of tax deferral
3. Explain how variable annuities work
4. Identify the cash value management tools available to a variable annuity contract owner
5. List the factors to be considered in determining variable annuity suitability
6. Calculate interest to be credited under various fixed annuity contracts
7. Explain the operation of indexed annuities
8. Describe how annuities are taxed
9. Recognize the requirements imposed on the sale of variable annuities under Regulation Best Interest