Practice Test Geeks(RAA) Registered Annuity Advisor Practice Test
← All RAA Flashcard Decks

Case Analysis & Practical Application Flashcards

7 cards from real RAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Case Analysis & Practical Application flashcards as text

  1. A 45-year-old high-income professional wants tax deferral beyond 401(k) limits. She already maxes her qualified plans. Which annuity feature is most relevant here?

    Answer: Non-qualified annuities offer unlimited contribution amounts with tax-deferred growth

    Non-qualified annuities have no IRS contribution limits, making them a useful tax-deferral vehicle once qualified plan limits are exhausted.

  2. A client owns a variable annuity with a guaranteed minimum withdrawal benefit (GMWB) rider. After a market downturn, her contract value falls to $0 but she has not exceeded her benefit base. What happens?

    Answer: The insurer continues paying the guaranteed withdrawal amount for life

    A GMWB rider guarantees that the insurer will continue paying the contractually specified withdrawal amount even after the account value is fully depleted.

  3. An advisor recommends a B-share variable annuity with a 7-year surrender schedule to a 74-year-old client who may need liquidity within 3 years. This is most likely a violation of:

    Answer: FINRA suitability and Reg BI best interest standards

    Recommending a long surrender-charge product to an elderly client with near-term liquidity needs violates the best interest standard requiring advisors to match product features to client circumstances.

  4. A client holds a qualified longevity annuity contract (QLAC) inside her IRA. Which statement best describes a key advantage?

    Answer: QLAC premiums are excluded from RMD calculations, deferring income until age 85

    QLACs allow up to the IRS-allowed premium to be excluded from RMD calculations, enabling the owner to defer that income stream until as late as age 85.

  5. Two clients both purchase $200,000 SPIAs at age 70. Client A chooses life only; Client B chooses life with 20-year certain. Which statement is accurate?

    Answer: Client A receives a higher monthly payment because there is no death benefit guarantee

    Life-only payouts are higher because the insurer bears no obligation to pay beneficiaries; adding a period-certain guarantee reduces the monthly amount.

  6. A client wants to use her non-qualified annuity to fund long-term care expenses. Which relatively recent product innovation directly addresses this need?

    Answer: Hybrid annuity with a long-term care or chronic illness rider

    Hybrid annuities combine traditional annuity accumulation with an LTC or chronic illness rider that multiplies the benefit when qualifying care is needed.

  7. A client's estate plan requires that annuity assets pass directly to heirs outside of probate. Which contract feature accomplishes this?

    Answer: A named beneficiary designation on the annuity contract

    Annuity contracts with a named beneficiary transfer the death benefit directly to that beneficiary by contract, bypassing the probate process entirely.