10 Credits: Taxes


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 Secure Transaction
Course Level
CPE Credits

10 Credits: Taxes

Course Description

Before this online self-study CPE course, the labyrinth of annuity contracts might seem impenetrable, with professionals grappling to understand and advise on them effectively. This course acts as a bridge, transforming participants from uncertain to confident in their understanding and application of annuity contracts. Before, the nuances of annuities might lead to unsuitable client recommendations. After completing this self-study CPE course, professionals will be able to accurately describe annuity types, explain payout mechanisms, and evaluate the suitability of annuities for clients. The course changes the approach to annuity contracts, ensuring participants can adeptly navigate their complexities, recommend suitable options, and enhance their professional effectiveness in client service.

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Learning Objectives

When you have completed this course you should be able to:

Chapter 1

  • Describe the profile of a typical annuity purchaser;
  • Identify the principal reasons why individuals purchase annuities;
  • Explain the traditional concept of an annuity; and
  • Identify the parties to an annuity contract and discuss their roles.

Chapter 2

  • Identify the methods by which annuity premium payments are made;
  • List the expensesgenerally associated with annuity contracts;
  • Explain when payout begins under deferred and immediate annuities;
  • Discuss how cash values are accumulated;
  • Describe annuity death benefits; and
  • Discuss the various annuitization methods available to settle annuity proceeds.

Chapter 3

  • Discuss how cash values are determined in a variable annuity;
  • Explain how the various variable annuity cash valuemanagement tools help contract owners manage the volatility of variable annuity cash values allocated to variable subaccounts;
  • Identify the various guaranteed living benefits available on variable annuity contracts;
  • Describe how variable annuitization may enable a contract ownerto overcome the erosion of annuity income and keep pace with inflation;
  • Discuss the features and benefits of variable annuities; and
  • List the factors that should be evaluated in determining the suitabilityof a variable annuity for a customer.

Chapter 4

  • Discuss how the current crediting interest rate is determined in declared-rate annuities;
  • Distinguish bonus and multi-year guarantee annuities from other types of annuities;
  • Describe the factors that affect the effective crediting interest rate in indexed annuities;
  • Explain how index call options are used in the operation of indexed annuities; and
  • Identify the various interest crediting methods used in indexed annuities.

Chapter 5

  • Discuss the income tax treatment of nonqualified annuity premiums and cash values;
  • Explain how nonqualified annuity surrenders and withdrawals are taxed;
  • Describe the exclusion ratioand its impact on the tax-free recovery of basis from periodic annuity payments made under nonqualified annuity contracts; and
  • Explain the income and estate tax treatmentof death benefits received under a nonqualified annuity contract.

Chapter 6

  • Define suitability in the context of an annuity transaction;
  • Describe the client information required to perform an appropriate annuity suitability analysis;
  • List the types of information that must be disclosed when making an annuity recommendation;
  • Identify those situations in which an insurance producer has no suitability obligation to the client; and
  • Describe the suitability recordkeeping obligations to which insurance producers are subject in connection with recommended annuity transactions.
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Course Specifics

Course ID
Revision Date
April 3, 2023

There are no prerequisites.

Advanced Preparation


Number of Pages

Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02338-23-S
IRS Federal Tax Law Credits: 10
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1906
CTEC Federal Tax Law Credits: 10

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at

Meet The Experts

Paul J. Winn

Paul J. Winn CLU ChFC is a writer with more than 30 years experience in the life insurance and securities industry as an agent/registered representative, an agency head, a marketing vice president for a life insurance company and the president of a corporate registered investment adviser. He was a long serving member of the advisory board to the New York State insurance department. He is a published book author and creator of more than 200 taxation, insurance and securities training courses.