Variable Contracts / Variable Annuities
Chapters in this video
- 0:00 The hybrid product where securities meet insurance
- 2:55 Accumulation versus annuitization phases
- 4:46 Life only, period certain, and joint survivor payouts
- 5:32 Fees, penalties, and the ordinary income tax trap
- 7:00 Sales rules and the 7-day principal review requirement
- 8:41 Rapid-fire exam recap
What this video covers
- Why variable annuities are securities requiring both a securities license and an insurance license, while fixed annuities are not securities
- How the accumulation phase builds tax-deferred value with no contribution limits, and what happens if withdrawals occur before age 59 1/2
- Why the annuitization decision is generally irrevocable, and how payment streams differ across life only, life with period certain, and joint and survivor options
- Why variable annuity withdrawals and payments are taxed as ordinary income even when underlying sub-accounts hold stocks, and how contingent deferred sales charges (CDSCs) penalize early exits
- What the variable annuity sales-practice rule requires, including the 7-business-day registered principal review window and the 36-month scrutiny period for exchanges
- Why a 1035 exchange is tax-free but not fee-free, since surrender charges on the old contract may still apply
Read the full lesson, free
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