Annuities

The type of annuity that can be purchased with one monetary deposit is called a(n):

Immediate annuity

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices, EXCEPT a(n):

Immediate annuity

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT

Income derived from the TSA is received income tax-free

A Variable Annuity has which of the following characteristics?

Underlying equity investments

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

deferred

A contract owner terminates an annuity before the income payment period begins. The owner will then receive

the current contract surrender value

A(n) ________ annuity pays benefits based on units rather than stated dollar amounts.

variable

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

variable

What is considered to be a characteristic of an immediate annuity?

Benefit payments start within one payment period of purchase

A 45 year-old woman won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?

Deferred Fixed annuity

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company

Does not have to make any further payments

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

Fixed Deferred

The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?

Flexible Installment Deferred

Variable annuities may invest premiums in each of the following, EXCEPT:

Insurer's corporate business account

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Life Annuity with Period Certain

Which of these is an element of a Single Premium annuity?

Lump-sum payment

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

Single Premium

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):

Straight Life annuity

Which type of contract liquidates an estate through recurrent payments?

annuity

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n

installment refund annuity