Chapter 8 - Annuities
Straight Life Annuity
14. The annuity that represents the largest possible monthly payment to an individual annuitant is a
Single Premium
15. S recently received a $500,000 lum sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation
Fixed Deferred.
16. 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
lump-sum payment.
17. Which of these is an element of a Single Premium annuity
the annuitant's payout period selection.
19. The monthly benefit of an Annuity Certain is determined by
Paid to the beneficiary for the rest of the certain period
2. Terry owns a 20 year life annuity certain and dies before the period of 20 years has elapsed. What happens to any monies left
Annuity.
20. Which type of contract liquidates an estate through recurrent payments
Life Annuity with Period Certain.
21. 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
Payments are made to an annuitant for life.
22. Which of these statements concerning an Individual Straight Life Annuity is accurate?
variable.
23. What type of annuity has a cash value that is based upon the performance of it's underlying investment funds
Single premium
24. An immediate annuity consists of a
Deferred.
27. 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?
Joint and survivor life annuity.
3. A husband and wife are receiving annuity payments. When the husband dies, the wife still receives annuity payments for life. What kind of annuity is this?
3 months after the annuity is bought
4. Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments
A periodic income to the annuitant for life
5. Kim has purchased a straight period life annuity. What will this type of annuity provide her with?
the annuitant's payout period selection.
6. The monthly benefit of an Annuity certain is determined by
Tax on the interest earned
7. John is an annuitant who has surrendered his annuity at age 55. What will he pay?
Refund life annuity
8. Kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. If she were to die, her beneficiary would continue receiving annuity payments until this amount has been reached. What type of annuity is this?
AD&D rider.
9. Which of the following is NOT included in an annuity contract
income derived from the TSA is received income tax-free;
12. All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT;
The systematic liquidation of accumulated funds
13. What is the basic function of an annuity
Benefit payments start within one payment period of purchase
. 18. What is considered to be a characteristic of an immediate annuity
The risk of living longer than expected
. 26. An individual who purchases a Life annuity is given protection against
Does NOT have to make any further payments
1. T. purchased a $100,000 single premium. Straight Life annunity 5 years ago. He has received monthly payments since the inception of the annuity. If, T dies, the insurance company:
Flexible Installment Deferred
10. The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?
the risk of living longer than expected
11. An individual who purchases a Life annuity is given protection against
25. W is a 39 year old female who just purchased an annuity to provide income for life starting at age 50. All of these would be acceptable annuity choices EXCEPT a:
Immediate annuity.
