Guide to Annuities

Course Description:

An annuity examines the annuity concept and explains what an annuity is and how it works.  The mechanics of the accumulation and payout phases of an annuity are examined and sample calculations are discussed.  An explanation of settlement options and their appropriate uses are covered.

The course also discusses annuity taxation. Federal income tax treatment of premature withdrawals, lump-sum distributions and periodic payments is considered.  An annuity discusses the different annuity contracts available and compares them with respect to client suitability, with particular emphasis on variable and fixed annuities.  Both product types are discussed in terms of single vs. periodic premium, immediate vs. deferred, qualified vs. non-qualified, and settlement options.

Learning Objectives:

Upon successful completion of this course, participants will be able to:

·         Explain the demographics of annuity buyers

·         Discuss the reasons why most annuity owners buy annuity contracts

·         Explain the characteristics of annuities in general and the benefits of tax deferral

·         Discuss how variable annuities work

·         Explain the tools available to a variable annuity contract owner for managing cash value volatility

·         Understand the requirements for variable annuity suitability

·         Demonstrate how interest is credited under specific fixed annuity contracts, including bonus annuities, multi-year guarantee annuities and interest indexed annuities

·         Explain how equity indexed annuities work

·         Discuss annuity taxation with respect to cash values, withdrawals and periodic payments