Annuities quiz

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

Nothing; the payments will cease

An individual buys a flexible premium deferred life annuity with 20 year period certain.What would his beneficiary receive if he died 5 years after beginning the annuity phase?

Payments for 15 years

Which of the following best describes a pure life annuity settlement option

Pure life provides payments for as long as the annuitant is alive

Annuities can be used to fund which of the following?

Retirement plan

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?

Insurer's guaranteed minimum rate of interest

Before he dies, 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?

50,000

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed amount

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select

Joint and survivor

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy.

Joint life

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

Life income with period certain

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?

Guaranteed surrender value

your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend.

Straight life

Which of the following is true regarding a market value adjusted annuity?

The owner is guaranteed interest rate for a specific period of time

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity

What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?

pure life

Which of the following is NOT true regarding the annuitant A. The annuitant must be a natural person B.The annuitant cannot be the same person as the annuity owner C.The annuitants's life expectancy is taken into consideration for the annuity D. The annuitant receives the annuity benefits

The annuitant cannot be the same person as the annuity owner.

The main difference between immediate and deferred annuities is

When the income payments begin

If the annuitant during the accumulation period, who will receive the annuity benefits?

The beneficiary

A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?

Joint and survivor

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

Live at least to his life expectancy

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?

Immediate annuity

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option.

It does not guarantee that the entire principal will be paid out

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deffered

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

Payments stop after the first death amount the annuitants

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

it is a life contingency option

All of the following statements are true regarding installments for a fixed amount Except

The payments will stop when the annuitant dies

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

only for the life annuitant

Which of the following is a short-term annuity that limits the amounts aid to a certain fixed period or until a certain fixed amount is liquidated?

annuity certain