annuities

When does an immediate annuity begin making payments?

After the first premium has been paid

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

Guaranteed lifetime withdrawal benefit

Which of the following is NOT a feature of equity-indexed annuities?

Offers a maximum interest rate that increases annually

How do interest earnings accumulate in a deferred annuity?

On a tax-deferred basis

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?

Period certain

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?

Premiums paid plus interest earned is returned to the beneficiary

What is the primary reason for buying an annuity?

Provide future economic security

Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity?

Temporary annuity certain

Which of these statements regarding the annuitant is CORRECT?

The annuitant's life expectancy determines the annuity payments

Who assumes the investment risk with a fixed annuity contract?

The insurer

What distinguishes a deferred annuity from an immediate annuity?

The time at which benefit payments start

The systematic liquidation of a sum of money is provided by a(n):

annuity

Under a non-qualified annuity, interest is taxed after the

exclusion ratio has been calculated

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

life income

An annuity which is backed by a life insurer's separate account is called a(n):

variable annuity

The taxable portion of each annuity payment is calculated using which method?

Exclusion Ratio