Chapter 7 Exam - XCEL Solutions
Insurer's corporate business account
Variable annuities may invest premiums in each of the following, EXCEPT:
Immediate Annuity; starts within 30 days from the purchase date
W is a 39-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)
Deferred
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Life Annuity with Period Certain
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
underlying equity investments
A variable annuity has which of the following characteristics?
Income derived from the TSA is received income-tax free
All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT
the risk of living longer than expected
An individual who purchases a life annuity is given protection against:
Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index
How does an indexed annuity differ from a fixed annuity?
Fixed Deferred
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?
Deferred Fixed Annuity
A 45 year old women won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?
The current contract surrender value
A contract owner terminates an annuity before the income payment period begins. The owner will then receive
Flexible Installment Deferred
The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?
Immediate Annuity
The type of annuity that can be purchased with one monetary deposit is called a(n)
Immediate annuity
The type of annuity that can be purchased with one monetary deposit is called a(n)
Benefit payments start within one payment period of purchase
What is considered to be a characteristic of an immediate annuity?
The systematic liquidation of accumulated funds
What is the basic function of an annuity?
A straight life annuity pays for the life of the annuitant.
Which of these statements concerning an individual straight life annuity is accurate?
Variable
A (n)___________ annuity pays benefits based on units rather than stated dollar amounts.
Installment Refund Annuity
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)
Immediate Annuity
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?
does NOT have to make any further payments
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
Income that cannot be outlived by the owner
T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?
Straight Life Annuity
The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):
S&P 500
Which of the following are Equity Indexed annuities typically invested in?
AD&D Rider
Which of the following is NOT included in an annuity contract?
Lump-sum payment
Which of these is an element of a single premium annuity?
Annuity
Which type of contract liquidates an estate through recurrent payments?
