Wednesday, October 17, 2012
Sample Suitability Question for Series 7, Annuities
Your customer is ready to retire next month. She wants to receive a monthly check for as long as she lives, but she is not impressed with the low rates of return on the fixed annuity illustration you walked her through last week. She has concerns about purchasing power and has a moderate risk tolerance; therefore, she would most likely be interested in which of the following?
A. deferred variable annuity
B. immediate variable annuity
C. deferred indexed annuity
D. immediate fixed annuity
EXPLANATION: as always, what can we eliminate? The phrase "ready to retire next month" eliminates choices A and C--deferral periods are perhaps 10 years long; this person wants payments immediately. Now, while I would prefer the immediate FIXED product; this individual clearly wants the VARIABLE annuity so she can be partly invested in stocks. Right? The answer is B here, no doubt about it. Get Series 7 Practice Questions Here