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S7 - Ch 11 - Basics of Life Insurance and Variable Annuities - Exam - Missed Questions

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An annuitant receives payment under a variable annuity for a number of years. At his death, his widow receives a lump-sum payment. The annuity is
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When the contributions are withdrawn, the amount withdrawn will not be subject to taxation.

Contributions made to a non-qualified variable annuity are after tax. For this reason, the withdrawal of contributions will not be subject to taxation. Earnings in this type of plan grow on a tax-deferred basis, but are taxed when withdrawn.