Primerica Life Insurance Exam Chapter 5

Fixed Annuity

type of annuity that guarantees a certain rate of return

Variable Annuity

hedge against inflation

Joint Life Annuity

payment to two or moer annuitants which ceases upon death of either

Annuitant

A person who receives an annuity contract's distribution. Annuitant must be a Natural Person

Multiple Life Annuity

Annuities Cover 2 or more lives.

single life annuity

Annuities cover one life.

Annuity Investment Options

Annuities may be classified as fixed or variable.

Fixed Period Annuity

Company promises a payout for a fixed or guaranteed period of time, independent of the survival of the annuitant

Annuitization period

In an annuity, the accumulated money is converted into a stream of income to the annitant

Annuities Certain

In contrast with life contingency benefit payment options, annuities certain are short term annuities that limit the amounts paid to a certain fixed period or until a certain fixed amount is liquidated.

Life Contingency Options

No guarantee that all the proceeds will be paid out

fixed amount installments

The annuitant selects how much each payment will be, and the insurer determines how long the benefits will be paid by analyzing the value of the account and future earnings.

fixed period installments

The annuitant selects the time period for the benefits, and the insurer determines how much each payment will be, based on the value of the account and future earnings projections. This option pays for a specified amount of time only, whether or not the annuitant is living.

Beneficiary

The one who recieves annuity assets.

Accumulation Period

The time over which the annuitant makes payments or investments in an annuity, and when those payments earn interest tax deferred.

Surrender Value

The value of a life assurance policy when it is turned into cash

Market Value Adjusted Annuity

a fixed annuity which shifts some of the investment risk to contract holder

Joint and Survivor Annuity

an annuity that provides payments over the life of both you and your spouse

Immediate Annuity

contract owner gets money immediately only if it is funded with a lump sum and provides payments that start within one year.

Indexed Annuities

fixed annuities that invest on a relatively aggressive basis to aim for higher returns

Nonforfeiture

Deferred annuity has a guaranteed surrender value that is available if the owner decides to surrender the annuity prior to annuitization

Deferred Annuity

Provides income payments start at some future date after one year. Either periodic payments or a lump sum.

Owner

The owner is the person who purchases the contract and has all of the rights such as naming the beneficiary and surrendering the annuity. The owner, however, does not have to be the one who receives the benefits; it could be the annuitant or the beneficiary.