Variable Annuities Exam 2024 100% Complete Solutions

if a life insurance policy has been sold (or _____-__-_____) to another party by the policy owner, the death benefit is taxed like a full surrender (any gain minus the cost basis is taxable as income) {Ans: transfer-for-value (exceptions: collateral assignments, transfer from 3rd party to the insured, viatical settlements, and business partners)}Assumed Interest Rate (AIR) {Ans: arbitrary rate of return set by the insurer for any separate account they establish; VA owner ust experience a separate account net investment rate of return that exceeds the AIR in order for those product values to go up}guaranteed death benefit {Ans: protects the principal against loss due to market declines; assures contact owner that his/her beneficiaries will receive at least the amount originally invested in the annuity if death occurs before the contract's maturity date (standard death benefit payable is usual greater of 1) the amount of prems paid, less any withdrawls; or 2) the contract's accumulated value)}difference between whole life and universal life {Ans: Whole life and universal life insurance are both types of permanent life insurance. Whole life insurance offers consistent premiums and guaranteed cash value accumulation, while a universal policy provides flexible premiums and death