Life Insurance Chapter 5

The owner will receive the surrender value of the annuity.

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

The period of time during which accumulated money is converted into income payments

Which of the following best describes what the annuity period is?

They earn lower interest rates than fixed annuities.

Which of the following is NOT true regarding Equity Indexed Annuities?

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

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

Annuity certain

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

Pay-in period

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

An annuity

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money?

Variable annuity

Which of the following products requires a securities license?

Annuities provide income that the annuitant cannot outlive.

Which of the following statements regarding annuities is correct?

Straight life

Which of the following types of annuities will generally provide the highest monthly income?

Creating an estate

Which of the following will NOT be an appropriate use of a deferred annuity?

Immediate

A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?

Joint and survivor

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?

The owner must be the party to receive benefits.

All of the following are true of an annuity owner EXCEPT

It is a life contingency option.

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

FINRA.

An agent selling variable annuities must be registered with

Payments for 15 years

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?

Retirement plans

Annuities can be used to fund which of the following?

It is a percentage of the cash value and decreases over time.

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

The beneficiary

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

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

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

Life income with period certain

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

When the income payments begin.

The main difference between immediate and deferred annuities is

Fixed amount

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

Guaranteed income

What do annuities provide for annuitants?