Classification - Annuities

What is a disadvantage of fixed annuities?

The downside to fixed annuities is that the earning potential may not be sufficient to offset the effects of inflation. A variable annuity can address this problem. The correct answer is: Earning potential may not be enough to offset the effects of inflation

Which annuity provides a guaranteed minimum rate of return?

A fixed annuity has a guaranteed minimum interest rate. The correct answer is: Fixed annuity

Which of the following fixed annuities has a minimum rate of return and a current rate of return that is connected to the S&P 500?

An equity indexed annuity will earn a guaranteed minimum interest rate up to a current interest rate that is tied to an equity index, such as the S&P 500. The correct answer is: Equity indexed annuity

What accounting unit is used during the annuity phase of a variable annuity?

During the annuity phase, annuity units are used in lieu of accumulation units to determine the amount of each annuity payment. The number of annuity units is fixed and is based on the contract's dollar value investment in the separate account, and how much the first annuity payment will be. The correct answer is: Annuity unit

Which of the following is characteristic of fixed annuities?

Interest rates are fixed during both phases of the annuity. Each payment amount is fixed, and premiums are invested in the insurer's general account. The correct answer is: Fixed interest rates during the payout period

In addition to a life insurance producer license, producers selling variable products must have a(n):

Producers selling variable products must have a securities license _ series 6 or 7 _ in addition to a life insurance producer license. The correct answer is: Series 6 or 7 license

The value of each accumulation unit varies:

The value of each accumulation unit varies daily. The correct answer is: Daily

For which of the following annuities must an agent have a securities license in order to sell?

Variable annuities are regulated as securities products. Any agent selling a variable annuity or variable life insurance policy must have a securities license in addition to a life insurance license. The correct answer is: Variable annuity

This annuity is regulated as a securities product and agents selling this product must have a securities license:

Variable annuities are regulated as securities products. Any agent selling a variable annuity or variable life insurance policy must have a securities license in addition to a life insurance license. The correct answer is: Variable annuity

Variable annuities have:

Variable annuities have variable interest rates and benefits. Because the interest rates are not guaranteed, the insurer cannot promise a certain dollar amount periodic annuity benefit. The correct answer is: Variable interest rates and benefits