Annuities Quiz
An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving payments: -1 months -6 months -12 months -24 months
1 month
What is the nonforfeiture value of an annuity before annuitization: -all premiums paid -all premiums paid plus interest -all premiums paid minus any withdrawals and surrender charges -all premiums paid, plus interest, minus any withdrawals and surrender charges
All premiums paid, plus interest, minus any withdrawals and surrender charges
Which of the following is considered to be the period when the accumulated value in an annuity is paid out: -annuitization phase -accumulation phase -principal phase -period certain phase
Annuitization Phase
Maria would like an annuity that provides a guaranteed accumulation or payout. This type of annuity she is seeking is called: -variable payout -fixed accumulation -interest guaranteed -annuity certain
Annuity certain
How are annuities given favorable tax treatment: -gains are tax deductible -gains are tax exempt at distribution -gains are taxed at distribution -gains are converted to tax credits
Gains are taxed at distribution
Which of these will have the highest monthly payout upon annuitization: -life with period certain -joint & survivor life -straight life -joint life
Straight life
Who assumes the investment risk with a fixed annuity contract: -the owner -the annuitant -the insurer -the beneficiary
The insurer
When does an immediate annuity begin making payments: -after multiple premiums have been paid -after the first premium has been paid -after policy has been active for one year -after the incontestable period
After the first premium has been paid
Which of the following is an annuity that is linked to a market-related index: -market related annuity -equity indexed annuity -deferred risk annuity -fixed amount annuity
Equity indexed annuity
Fixed annuities provide each of the following except: -guaranteed interest -retirement funds -hedge against inflation -tax advantage
Hedge of inflation
Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies: -life only -life with period certain -cash refund -installment refund
Life only
Which type of annuity stops all payments upon the death of the annuitant: -life annuity -period certain annuity -cash refund annuity -joint and survivor annuity
Life annuity
Which settlement option pays out a stated amount to an annuitant, but no residual value to a beneficiary: -fixed period -interest only -installment refund -life income
Life income
Which of these statements regarding the annuitant is correct: -the contract can only be assigned by the annuitant -the annuitant is the only individual who can surrender the contract -the annuitant must also be the beneficiary -the annuitant's life expectancy determines the annuity payments
The annuity's life expectancy determines the annuity payments
Simon has purchased a fixed annuity. His payment amount will be dependent upon principal, interest and the contract's: -surrender charge -death benefit -cash refund -income period
Income period