4-HOUR ANNUITY SUITABILITY AND
BEST INTEREST STANDARDS EXAM
WEBCE 2026/2027 ACTUAL QUESTIONS
WITH VERIFIED ANSWERS.
What covers the cost of a variable annuity's death benefit? -
correct answer-the mortality and expense charge
Ten years ago, John purchased a deferred annuity and named
his daughter, Suzanne, as beneficiary. Over the years, John
invested $50,000 in the contract; upon his death, the contract
was valued at $118,000. Assuming that John died without
annuitizing and the contract contained the standard death
benefit provision, how much will Suzanne receive? - correct
answer-$118,000
At what point are a nonqualified annuity's earnings subject to
income tax? - correct answer-when they are withdrawn from the
contract
All of the following are common modal annuitization payout
options EXCEPT: - correct answer-lump-sum
, Troy purchased a deferred annuity for $100,000, naming
himself and his wife as joint annuitants and his daughter, Trudy,
as beneficiary. Ten years later, the contract had grown to
$235,000, and Troy decided to annuitize under a joint and
survivor life payout. He and his wife had received income
totaling $50,000 when Troy died. How much will daughter Trudy
receive at Troy's death? - correct answer-(Wrong) $180,000
The exchange of one annuity contract for another is a tax-free
transaction under the rules of: - correct answer-annuitization
What is the process of converting an annuity's accumulated
value into a periodic income stream? - correct answer-IRC
Section 1035
Which of the following correctly describes the basic income tax
treatment of nonqualified annuities? - correct answer-Contract
principal is not subject to taxation; interest earnings are subject
to taxation.
Lorraine invested $50,000 in a nonqualified deferred annuity at
the age of 50. Three years later, the contract has grown to
$64,000, and Lorraine takes a $5,000 withdrawal. The contract
BEST INTEREST STANDARDS EXAM
WEBCE 2026/2027 ACTUAL QUESTIONS
WITH VERIFIED ANSWERS.
What covers the cost of a variable annuity's death benefit? -
correct answer-the mortality and expense charge
Ten years ago, John purchased a deferred annuity and named
his daughter, Suzanne, as beneficiary. Over the years, John
invested $50,000 in the contract; upon his death, the contract
was valued at $118,000. Assuming that John died without
annuitizing and the contract contained the standard death
benefit provision, how much will Suzanne receive? - correct
answer-$118,000
At what point are a nonqualified annuity's earnings subject to
income tax? - correct answer-when they are withdrawn from the
contract
All of the following are common modal annuitization payout
options EXCEPT: - correct answer-lump-sum
, Troy purchased a deferred annuity for $100,000, naming
himself and his wife as joint annuitants and his daughter, Trudy,
as beneficiary. Ten years later, the contract had grown to
$235,000, and Troy decided to annuitize under a joint and
survivor life payout. He and his wife had received income
totaling $50,000 when Troy died. How much will daughter Trudy
receive at Troy's death? - correct answer-(Wrong) $180,000
The exchange of one annuity contract for another is a tax-free
transaction under the rules of: - correct answer-annuitization
What is the process of converting an annuity's accumulated
value into a periodic income stream? - correct answer-IRC
Section 1035
Which of the following correctly describes the basic income tax
treatment of nonqualified annuities? - correct answer-Contract
principal is not subject to taxation; interest earnings are subject
to taxation.
Lorraine invested $50,000 in a nonqualified deferred annuity at
the age of 50. Three years later, the contract has grown to
$64,000, and Lorraine takes a $5,000 withdrawal. The contract
