Annuities

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? A $50,000 B $62,500 C $75,000 D Nothing

A $50,000

How long is the right to examine period for new individual annuities issued in this state? A 10 days B 20 days C 45 days D 90 days

A 10 days

Which of the following is NOT true regarding an annuity certain? A Benefits stop at the annuitant's death. B It will pay until a fixed amount is liquidated. C There are no life contingencies. D It is a short-term annuity.

A Benefits stop at the annuitant's death.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a A Joint life annuity. B Joint and survivor annuity. C Deferred annuity. D Pure annuity

A Joint life annuity.

Which of the following is another term for the accumulation period of an annuity? A Pay-in period B Premium period C Liquidation period D Annuity period

A Pay-in period

All of the following information about a customer must be used in determining annuity suitability EXCEPT A Annual income. B Beneficiary's age. C Tax status. D Financial experience

B Beneficiary's age.

The term "fixed" in a fixed annuity refers to all of the following EXCEPT A Amount and length of payments B Death benefit C Guaranteed rate of interest D Equal annuity payments

B Death benefit

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? A Full premium refund without any charges B Guaranteed surrender value C No payments D Annuity dividend

B Guaranteed surrender value

Why is an equity indexed annuity considered to be a fixed annuity? A It is not tied to an index like the S&P 500. B It has a guaranteed minimum interest rate. C It has modest investment potential. D It has a fixed rate of return.

B It has a guaranteed minimum interest rate.

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive A The remainder of the principal. B Nothing; the payments will cease. C Guaranteed minimum benefit. D The amount paid into the annuity

B Nothing; the payments will cease.

Under a pure life annuity, an income is payable by the company A For as long as either the annuitant or a named beneficiary is alive. B Only for the life of the annuitant. C Until the principal and interest are exhausted. D For a guaranteed period of time, whether or not the annuitant survives to the end of that period.

B Only for the life of the annuitant.

Which of the following best describes what the annuity period is? A The period of time from the effective date of the contract to the date of its termination B The period of time during which accumulated money is converted into income payments C The period of time from the accumulation period to the annuitization period D The period of time during which money is accumulated in an annuity

B The period of time during which accumulated money is converted into income payments

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT A The payments are not guaranteed for life. B The insurer determines the amount for each payment. C It is a life contingency option. D It will pay the benefit only for a designated period of time

C It is a life contingency option.

Which of the following can surrender a deferred annuity contract? A The beneficiary after the owner's death B A deferred annuity cannot be surrendered. C Only the annuity owner D Only the insurance company for nonpayment of premiums

C Only the annuity owner

Which of the following is NOT true about a joint and survivor annuity benefit option? A This option guarantees income for two or more recipients. B The surviving annuitant may receive reduced payments. C Payments stop after the first death among the annuitants. D A period certain option may be included.

C Payments stop after the first death among the annuitants.

The main difference between immediate and deferred annuities is A The number of insureds. B The amount of each payment. C When the income payments begin. D How the annuity is purchased

C When the income payments begin.

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits? A Variable period B Variable amount C Fixed period D Fixed amount

D Fixed amount

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits? A Variable annuity B Flexible payment annuity C Deferred interest annuity D Immediate annuity

D Immediate annuity

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called A Life income with refund. B Joint and survivorship. C Joint life annuity. D Life income with period certain

D Life income with period certain