Annuities

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life income

Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?

Life only

Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity?

Temporary annuity certain

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?

1 month

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?

Accumulation period

What is the nonforfeiture value of an annuity before annuitization?

All premiums paid, plus interest, minus any withdrawals and surrender charges

Which of these is NOT considered to be a purpose of an annuity?

Annuities are intended to create an estate

The taxable portion of each annuity payment is calculated using which method?

Exclusion ratio

Which of these annuities require premium payments that vary from year to year?

Flexible premium deferred annuity

How are annuities given favorable tax treatment?

Gains are taxed at distribution

An annuitant is guaranteed to not outlive their benefits with a...

Guaranteed lifetime withdrawal benefit

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

Which type of annuity stops all payments upon the death of the annuitant?

Life annuity

Which annuity payout option allows the policy owner to choose a predetermined number of benefit payments?

Period Certain

During the accumulation period, who can surrender an annuity?

Policyowner

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?

Premiums paid plus interest earned is returned to the beneficiary

In a new tenant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?

Refund annuity

Which market index is normally associated with an indexed annuity's rate of return?

S&P 500

Which of these will have the highest monthly payout upon annuitization?

Straight life

Which of these statements regarding the annuitant is CORRECT?

The annuitant's life expectancy determines the annuity payments

Who assumes the investment risk with a fixed annuity contract?

The insurer

If the annuitant dies before the annuity start date,

The premiums paid plus interest earned will be given to the beneficiary