Insurance Exam: Chapter 5

Which of the following products requires a securities license?

Variable annuity

Which of the following is true regarding a modified guaranteed annuity?

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

Fixed annuities provide all of the following EXPECT

Hedge against inflation

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner

Before he died, 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

Which of the following is NOT true about a joint and survivor annuity benefit option?

Payments stop after the first death among the annuitants

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

Your client's employer does not offer a company-wide annuity contract. What type of annuity contract could your client obtain?

Individual

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

It provides a higher monthly benefit than a pure life annuity

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

The equity in an equity index annuity is linked to

An index like Standard & Poor's 500

The term "fixed" in a fixed annuity refers to all of the following EXPECT

Death benefit

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

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

The payments will stop when the annuitant dies

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate

What is the advantage or having a qualified annuity?

Favorable tax treatment

The act that sets the standards for advice given by insurance producers regarding annuities is known as the Nebraska

Protection in Annuity Transaction Act

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

It is a life contingency option

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

The surrender charge is a percentage of the cash value and decreases over time