About This Chapter
Variable Life Insurance & Annuities - Chapter Summary
This chapter presents easy-to-use information about variable life insurance and annuities. Using short, engaging lessons or the lesson transcripts, you'll easily learn the federal tax laws and regulations surrounding these investments. Your knowledge of key terms and concepts about how life insurance works are quickly checked using our self-assessments. With user-friendly lessons, you will soon master these concepts and be ready to use the vocabulary. When you've completed this chapter, you will be able to:
- Define variable annuity and variable life insurance
- Explain the pros and cons of variable life insurance and annuities
- Understand purchasing and exchanging variable annuities
- Explain annuitization and how it works
- Analyze FINRA Rule 2320
- Describe tax laws pertaining to variable annuity contracts
- Identify uses of a tax-free 1035 Exchange, and name its advantages
Use the components of these lessons as much or as little as you need. Simply read the accompanying text and complete the self-check quizzes. By keeping the lessons brief and offering ample opportunities for review, you are sure to be successful.
1. What is a Variable Annuity? - Definition, Pros & Cons
In this lesson we will look at how variable annuities serve as an option for retirement investing. We will also go over some of the key pros and cons of annuities compared to other types of investment accounts.
2. Characteristics of Variable Life Insurance & Annuity Contracts
During this lesson, we will review the characteristics of variable life insurance and annuity contracts. There will be a short quiz following the lesson.
3. Separate Accounts: Definition, Purpose & Management
During this lesson, we'll take an in depth look at the separate account component of variable annuities. After completing this lesson, you'll be able to identify the many features of the separate account.
4. Valuating Variable Annuity Contracts
Variable annuities are an attractive option for investors hoping to maximize their growth potential before retirement. During this lesson, we will review how the value of these contracts is determined.
5. Purchasing & Exchanging Variable Annuities
What is a variable annuity? In this lesson, learn about the types of policies available, considerations when purchasing a new policy, and considerations when exchanging one policy for another.
6. What is Annuitization? - Definition & Overview
Annuities are purchased frequently by individual people and investors as a means to ensure a future steady stream of income. Annuities are sold by most insurance companies.
7. FINRA Rule 2320: Variable Contracts of an Insurance Company
The Financial Industry Regulatory Authority (FINRA) is responsible for regulating the activities of all U.S. investment broker/dealers. In Rule 2320, FINRA discusses the sale of variable insurance contracts.
8. Tax Treatment of Variable Annuity Contracts: Description & Overview
In this lesson, we will review the tax treatment for variable annuities during both the accumulation and annuitant phases. We will also review the tax consequences if a variable annuity contract is surrendered.
9. What Is a Tax-Free 1035 Exchange? - Definition & Advantages
The Section 1035 Exchange is regulated by the Internal Revenue Service (IRS) and defines how to defer taxes on certain annuities and life insurance policies; frequently these are for retirement income. Learn more in this lesson.
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Other chapters within the Series 7 Exam: Study Guide & Practice course
- Advertising & Public Communication in the Securities Industry
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- New Issue Regulations in the Securities Industry
- Brokerage Account Types & Restrictions
- Retirement Plans & Tax-Advantaged Accounts
- Handling Customer Investment Information & Discretionary Accounts
- Obtaining Supervisory Approvals for Investment Accounts
- Analyzing Customer Investment Profiles
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- Tax Treatment of Equity Securities Transactions
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- Direct Participation Programs
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- Registered Hedge Funds
- Asset-Backed Securities
- U.S. Government Agency Securities
- Investment Product Disclosures
- Customer Updates & Record Retention
- Customer Transactions & Confirmations
- Transactional Delivery Obligations & Settlement Procedures
- Investment Disputes & Customer Complaints
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