Annuity Suitability Certification Practice Exam 2025 – The Comprehensive Guide to Mastering Your Certification!

The choice stating that annuities may be suitable for IRA rollovers is correct because annuities can serve as effective vehicles for retirement savings and income, particularly when rolling over funds from an Individual Retirement Account (IRA). When funds from an IRA are transferred to an annuity, they can continue to grow tax-deferred until withdrawn, which helps maintain the tax advantages of retirement savings.

Moreover, many individuals use annuities as an option for receiving guaranteed income during retirement, an attractive feature when transitioning funds from an IRA. The rollover process must comply with IRS guidelines, but if properly executed, it allows the funds to continue growing without immediate tax implications. This suitability depends on the individual's financial situation and goals, making it a viable option for many.

The other statements contain inaccuracies regarding annuities. For example, there is no restriction on the amount that can be transferred under a 1035 exchange, hence the first statement is misleading. The second statement incorrectly suggests that the same person cannot be both the annuitant and the owner of an annuity, which is not true, as many people do both. Lastly, while the IRS does apply a penalty on early withdrawals for nonqualified annuities, there are scenarios where exceptions might apply,