annuities

Variable annuity

Under which of the following annuities is the exact monthly benefit not known in advance?

Joint with full survivor

Abraham has a son age 10. Now, he plans to retire. From his retirement annuity, he would like to provide himself with monthly benefits for the rest of his life. Should he die before his son, he would like to provide lifetime benefits to his son. He should select:

Accidental death fee

All of these may be found in a variable annuity EXCEPT: 1. Mortality and expenses charges 2. Annual administration fee 3. Investment management fee 4. Accidental death fee

Less than the month before

Elvis has a variable annuity with a 3.5% AIR. During the annuity period, the account earns 3.0%. The income paid out for that month will be:

live at least his life expectancy

If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to:

straight life annuities

If the mortality rate were to suddenly decrease in a given year, the insurance company would be at a financial disadvantage on which of the following?

Not currently taxed since all annuities grow tax-deferred

In a deferred annuity, the annual growth is:

Fixed annuities

Insurers who market all of the following types of contracts must establish a separate account EXCEPT: 1. Variable annuities 2. Combination annuities 3. Fixed annuities 4. Variable life

deferred fixed annuity

On September 1, 2000, Mulva bought an annuity paying 3% per year with a flexible premium and starts receiving fixed-benefits on September 1, 2012. What kind of annuity did Mulva purchase?

Joint and Full Survivor Option

Provides income for two people; if one dies, the same income payments continue to the survivor for life. There is no beneficiary after the second person dies.

$6,000

Richard died after receiving $200 monthly for 10 years from a $30,000 installment refund annuity. His wife, Liz, is his beneficiary. Liz will now receive the same monthly benefit until her payments total:

Pure life / life annuity

Shania has accumulated $100,000 in a retirement annuity. Shania wants to select the benefit option that will pay the largest monthly amount for as long as she lives. Her agent should recommend:

age of the annuitant

The annuity income amount is based on whose life in an immediate annuity?

Annuitization Date

The date on which the insurer begins to make annuity payments.

Life income with period certain

The form of annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payments for a minimum number of years?

Joint and 1/2 Survivor Option

The survivor income is reduced to one-half

fixed annuity

This annuity pays a set interest rate for a given period of time, usually one year

as long as the annuitant is alive

Under a straight life annuity, an income is payable by the company:

Income taxable as ordinary income on a LIFO basis, plus 10% pre-59 ½

When funds are borrowed or withdrawn from a deferred annuity, they are:

The accumulation value or the premium paid, whichever is greater

When the annuitant owning a deferred annuity dies, the beneficiary will receive:

It allows the annuitant to receive an income that may increase with the cost of living

Which of the following statements best characterize the reason for purchasing a variable annuity, as opposed to a fixed annuity?

Installment refund annuity

Your client purchases a single premium annuity with $50,000 and dies after only receiving $30,000 of principal. At this point, the insurance company sends out consistent payments to the beneficiary until the $20,000 "balance" is paid out. What kind of annuity did your client purchase?

Life with Period Certain

guarantees regular payment of a certain sum for the life of the annuitant. In case he or she dies before the completion of a specified period, the payments are made to a designated beneficiary until the end of that period.

joint and full survivor

which type of annuity will guarantee lifetime income to two annuitants?

cash surrender value

The accumulated value less any surrender charges and other applicable deductions for an annuity contract or life insurance policy.

As a male, Kirby's payment will be larger

Kirby and Puckett are twins. When their grandfather died, he left each of them $100,000, which they used to purchase an annuity. When they retire, since each selected the life income option, who will receive the larger monthly annuity?

Loan interest will be charged until repaid

Loans may be taken from some annuities. If so:

An annuity period certain

Roger is 35 years old and plans to retire at age 50. He wants to provide an income from the time he retires until he is able to receive Social Security benefits at age 65. He would likely purchase:

Cash refund annuity

What type of annuity promises to pay a beneficiary, in a lump sum, the difference between the amount paid into the contract and the benefits prior to the annuitant's death?

joint and survivor

A _________________________ annuity must have two or more annuitants and married couples often purchase them to guarantee a surviving spouse receives a regular income for life.

joint life with last survivor

A _____________________________ annuity is an insurance product that provides each spouse or partner with income payments until they both pass away. It also allows for payments to be made to a designated third party or beneficiary even after the death of one of the spouses or partners.

Health at retirement

A customer is considering purchasing a fixed annuity. He asked his agent to tell him how much he can expect to receive at retirement. The agent explained that all of the following affect the amount of the monthly income at payout EXCEPT:

Variable Annuity

A person wishing to buy an annuity that may provide monthly income tied to economic and market conditions should buy a:

annuity certain

An annuity that is payable for a stated period of time, regardless of whether the annuitant lives or dies (if the annuitant dies before all the payments are made, the remaining payments are made to the annuitant's beneficiary).

An annuity certain annuity (will only pay for the stated period - not a lifetime)

An individual interested in payments from an annuity for a short period of time, without a lifetime guarantee, would choose:

Joint and full survivor

Brad and Angelina's retirement annuity pays them $25,000 per month. Brad dies and Angelina continues to receive a $25,000 per month for as long as she lives. When Angelina dies, payments stop. What settlement option did they select?

surrender charge

In a deferred annuity, the difference between the value of the account and the amount received in an early surrender is the:

immediate

Ivana purchases a $750,000 annuity with a single premium and begins taking payments one month later. What type of annuity does Ashley have?

Equity indexed annuity

Madonna is funding an annuity to supplement her retirement. Because she does not know what effect inflation may have, she would like a return that would be tied to the Standard and Poor's 500 index. She would likely purchase a(an):

Life with period certain

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for at least a minimum number of years is called:

May elect an "extended term" death benefit

Under the "non-forfeiture values" of a flexible premium variable annuity, a person may do all of these EXCEPT: 1. Surrender the contract for the cash value at any time (minus CDSC if applicable) 2. May elect a "paid up" immediate annuity 3. May elect an "extended term" death benefit 4. May elect a "paid up" deferred annuity

straight life annuity

What annuity provides a person with the highest monthly income?

Once he began receiving payments, he couldn't change his options

When Jim retired from his career as a schoolteacher, he had accumulated $100,000 in a retirement annuity. He decided to take his savings out in the form of a straight life annuity. When Jim's health changed, and he needed extra money to live on, he discovered:

the annuitant or his survivor is guaranteed 10 years of payments, and if the annuitant survives 10 years, he/she is guaranteed payments until death

a life annuity with 10 years certain means:

joint and survivor annuity

an annuity that pays an income based on the life span of two or more people is called a

joint and last survivor

two or more people are named to receive the annuity payment. Continuing income payments are made as long as one annuitant, out of two or more annuitants remains alive.

joint and survivor

________________________ annuity is an insurance product that continues regular payments as long as one annuitant is alive.

immediate

an annuity whose benefits start within one year of purchase is called:

Accumulation and Payout.

An Annuity has two Periods:

3 years of monthly payments

An annuitant has a life annuity, 10 year certain. He begins receiving benefits at 65 and dies at 72. His survivor will receive:

$50,000

Before he died, Gilligan had received $12,500 in monthly benefits from his $25,000 pure life annuity. He was also the insured under a $50,000 whole life policy that named his wife, Mary Ann, as primary beneficiary. Counting both contracts, how much will Mary Ann receive in benefits?

accumulation phase

Before the payout period begins, the annuity is in the accumulation phase.

insuring clause

One is the ___________________, in which the insurer agrees to pay on behalf of the insured all sums that the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, wrongful death, or injury to another person's property.

cash refund

Your client purchases a single premium annuity with $50,000. However, he dies after receiving only $20,000 of principal. At this point, the insurer sends a check for $30,000 to the beneficiary of the annuitant. What kind of annuity did he purchase?