Exam Series 6 topic 1 question 301 discussion

Actual exam question from FINRA's Series 6

Question #: 301
Topic #: 1

Your client bought a variable annuity contract that has a 5% contingent deferred sales charge with a 7-year surrender period four years ago. He has been reading about bonus annuities and 1035 exchanges and has asked for your advice. You can tell him:

A. that it’s a great idea, and you plan on how you’re going to spend the unexpected income.
B. that although the exchange doesn’t have any tax consequences, he’ll be looking at a new, longer, surrender period.
C. that he’ll have to pay the 5% deferred sales charge if he executes the exchange.
D. both B and C.

Show Suggested Answer

Suggested Answer: D 🗳️
If your client bought a variable annuity contract with a 7-year surrender period four years ago, you can tell him that even though there will be no tax consequences associated with the exchange, hell have to pay the 5% deferred sales charge if he executes the exchange, and hell be looking at a new, longer, surrender period-one of the less desirable features associated with bonus annuities.

by lolojepu at April 6, 2025, 1:32 a.m.

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Exam Series 6 topic 1 question 301 discussion

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