Annuities

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

An immediate annuity

Which type of contract liquidates an estate through recurrent payments?

Annuity

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 A variable annuity's cash value will depend on the results of its investment funds.

A Variable Annuity has which of the following characteristics?

Underlying equity investments

Variable annuities may invest premiums in each of the following

Common Stock, Money Market Securities, Junk Bonds

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

Income that cannot be outlived by the owner

Which of these statements concerning an Individual Straight Life annuity is accurate?

Payments are made to an annuitant for life

Which of the following are Equity Indexed annuities typically invested in?

S&P 500