Variable Annuities and Life Insurance: Rapid Fire
Chapters in this video
- 0:00 Split personality: the general account and the separate account
- 1:17 Accumulation units versus annuity units and the irrevocable switch
- 2:47 Payout options and where guarantees really come from
- 3:50 The 1035 exchange one-way street and LIFO withdrawal taxation
- 5:53 The trap room: 10% penalty, 36-month look-back, and zero step-up
- 6:55 Rapid-fire exam recap
What this video covers
- Why a variable annuity is both a security and an insurance contract, and which two registrations apply
- How the separate account differs from the general account in terms of risk, guarantees, and creditor protection
- The mechanics of accumulation units versus annuity units, and why annuitization is irrevocable
- How the Assumed Interest Rate (AIR) determines whether payments rise, fall, or stay level during the annuity phase
- Why guarantees depend on the insurer's claims-paying ability and what happens if the insurer becomes insolvent
- The strict right-only direction of a 1035 exchange and why LIFO (last-in, first-out) taxation matters for withdrawals
- The compliance deadlines and look-back rules: 7 business days for supervisory review, 36 months for exchange history, and the 10% early withdrawal penalty before age 59 1/2
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