Annuities
Which of the following best describes what the annuity period is? A. period during which accumulated money is converted into income B. period of time from the accumulation period to the annuitization period C. period of time during which money is accumulated in an annuity D. period of time from effective date of contract to the date of its termination
A
Someone 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? A. flexible payment annuity B. deferred interest annuity C. immediate annuity D. variable annuity
C
Which of the following best describes a bail-out provision? A. allows the owner to receive a higher interest rate at certain timeframe B. decreases the annuity surrender value C. allows the owner to surrender the annuity without a charge D. waives the surrender charge for the annuitants confined to a LT care facility
C
Which of the following can surrender a deferred annuity contract? A. the beneficiary after the owner's death B. a deferred annuity can't be surrendered C. only the annuity owner D. only the insurance company for nonpayment of premiums
c
An annuity owner is funding an annuity that will supplement her retirement. Because she doesn't know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the S&P 500. She would likely purchase a(n) A. equity indexed annuity B. variable annuity C. flexible annuity D. immediate annuity
A
After 3 years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called? a) Inflation adjustment b) Surrender charge c) Termination penalty d) Bail out charge
B
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT A. the payments aren't guaranteed for life B. the insurer determines the amount for each payment C. it's a life contingency option D. it will pay the benefit only for a designated period of time
C
Which of the following is NOT true about a joint and survivor annuity benefit option? A. this option guarantees income for two or more recipients B. the surviving annuitant may receive reduced payments C. payments stop after the first death among the annuitants D. a period certain option may be included
C
The annuity owner dies during the accumulation period of his annuity. The cash value of his annuity exceeds the premiums he paid. There is no named beneficiary. Which of the following is true? A. the cash value will be paid to the annuitant's estate B. the premium value will be paid to the annuitant's estate C. the state government will receive the amount of premiums paid D. the state government will receive the cash value of the annuity
A
Which of the following is TRUE regarding the accumulation period of an annuity? A. referred to as the annuity period B. period of time during which beneficiary receives income C. limited to 10 years D. period during which the payments into the annuity grow tax deferred
D
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? A. fixed B. flexible premium C. immediate D. deferred
D
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined? A. surrender charge is always 7% of cash value B. surrender charge is a flat fee determined by the annuity owner when the annuity is purchased C. surrender charge will increase as the accumulation period increases D. surrender charge is a percentage of the cash value and decreases over time
D
