Texas 4hr Annuity & Best Interest Training

This course 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 are considered. It also 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. Annuity suitability and the Best Interest (BI) standard are examined in detail.

Upon completion of this course, the student should be able to:

1. Describe a typical annuity buyer and the principal reasons individuals buy annuity contracts;
2. List the characteristics of annuities and the benefits of tax deferral;
3. Explain how variable annuities work;
4. Identify the cash value management tools available to a variable annuity contract owner;
5. List the factors to be considered in determining variable annuity suitability and recognize the responsibilities imposed under the Best Interest (BI) standard;
6. Calculate interest to be credited under various fixed annuity contracts;
7. Explain the operation of index annuities;
8. Describe how annuities are taxed.