Annuities

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

An immediate annuity

What is considered to be a characteristic of an immediate annuity?

Benefit payments start within one payment period of purchase

An Individual who purchased a Life annuity is given protection against:

the risk of living longer than expected

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

Fixed Deferred

W is a a39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

I

How does an indexed annuity differ from a fixed annuity?

Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

Which of the following are Equity Indexed annuities typically invested in?

S&P 500

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

Single Premium Immediate Joint with Survivor Annuity

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company

does NOT have to make any further payments

What does an immediate annuity consist of

single premium