Annuities

Regarding a straight-life variable annuity, which of the following statements is TRUE?

The number of annuity units a client redeems never changes

Which of the following regarding equity indexed contracts is correct?

They guarantee a certain rate of growth

Which of the following statements regarding annuities is NOT correct?

Anyone can set up an annuity and pay income for life

An annuity, purchased with a lump-sum payment, with income payments to begin one year from the purchase date, is what type of annuity?

A single premium immediate annuity

Regarding variable annuity contracts, which of the following statements is NOT true?

An agent who holds a life only license may sell variable products

Joe Agent's client is 65 years old and retired. The client is concerned about budgeting funds and needs income for everyday living expenses starting now. Joe Agent could suggest that the client purchase

An immediate annuity

Which of the following best describes the risks borne by the annuitant in a nonqualified variable annuity?

Interest rate risks

Which of the following is correct about the prospectus that must be furnished when selling a variable life insurance policy?

It contains information about the nature and purpose of the insurance plan

An annuity may be purchased under all of the following methods EXCEPT:

Periodic payment, immediate annuity

Why do the securities held in a separate account of a variable annuity consist primarily of common stocks?

Prices on common stock tend to reflect increases or decreases in the cost of living

All of the following statements about tax-sheltered annuities are FALSE except:

Taxes on earnings are deferred

Mr. Jones wants a source of retirement income that is stable, but that also could offer some protection against purchasing power risk in time of inflation. You should recommend

a combination annuity (part fixed and part variable)

The difference between a fixed annuity and a variable annuity is that the variable annuity

attempts to offer protection to the annuitant from inflation

Which of the following features of equity-indexed annuities guarantees that past increases in accumulated cash value will not be lost?

Ratcheting