West Virginia State Life Insurance Practice Exam

When recommending a purchase or exchange of an annuity, what is NOT required to be disclosed by an applicant?

1. Financial status

2. Investment goals

3. County of residence

4. Risk tolerance

The correct answer is: County of residence

In the context of recommending a purchase or exchange of an annuity, the disclosure of the county of residence is not typically required. The primary focus when assessing suitability for an annuity includes factors that directly impact the individual's financial situation and goals. Financial status, investment goals, and risk tolerance are essential elements that help the financial advisor understand the client’s needs and objectives, allowing them to recommend the most suitable products. Financial status encompasses the individual’s income, expenses, assets, and liabilities, which are critical to determining the appropriateness of an annuity for their financial plan. Investment goals outline the purpose for which the individual is investing, whether it is for retirement, education, or wealth accumulation, while risk tolerance assesses an individual's willingness and ability to take on investment risk. On the other hand, the county of residence is not a factor that affects the suitability of an annuity or the product's performance. It does not influence the financial advice or the strategy being implemented, thus making it unnecessary for disclosure during the recommendation process.