LESSON 7: ANNUITIES - FIXED AND VARIABLE

Section 7.4 Review

Which of the following applies to annuity income tax treatments and benefits?

	a)	Taxes are only paid when interest is withdrawn.
	b)	A 10% excise tax penalty exists.
	c)	The exclusion ratio allows clients to receive income partially income tax free.
	d)	Section 1035(a) exchanges are a way to move annuity funds income tax free.
	e)	All of the above.
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The excise penalty tax is imposed before the annuitant reaches the age of:

	a)	59 1/2
	b)	62
	c)	69
	d)	70 1/2
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A structured settlement occurs when an annuity is used to distribute funds from the settlement of lawsuits or the winnings of lotteries and other contests.

	a)	True
	b)	False
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The exclusion ratio is considered ______% in variable annuities.

	a)	25
	b)	50
	c)	75
	d)	100
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