Annuities

An agent selling variable annuities must be registered with a. FINRA b. department of insurance c. the guaranty association d. SEC

a. FINRA

A married couples retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife does, payments stop. What settlement option did they select? a. straight life b. joint and survivor c. joint annuity d. cash refund annuity

b. joint and survivor

Annuitities can be used to fund which of the following? a. estate creation b. retirement plans c. variable life insurance d. group life insurance

b. retirement plans

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a a. nonforfeiture option b. rollover c. settlement option d. nontaxable exchange

c. settlement option

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? A installments for a fixed amount B installment refund C cash refund D installments for a fixed period

D installments for a fixed period

Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? a. annuitiization b. bail out c. surrender d. nonforfeiture

b. bail out

Equity indexes annuities A seek higher returns B are more risky than variable annuities C are security instruments D invest conservatively

A seek higher premiums

Which of the following is not true regarding the accumulation period of an annuity? A it is the period during which the annuity payments earn interest B it is the period over which the owner makes payments into an annuity C it is also known as the pay- in period D it would not occur in a deferred annuity

D it would not occur in a deferred annuity

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is true? A the owners estate will receive the money paid into the annuity B the insurance company will retain the cash value and pay back the premiums to the owners estate C the money will continue to grow tax- deferred until the liquidation period, and then will be paid to the beneficiary D the beneficiary will receive the greater of the money paid into the annuity or the cash value

D the beneficiary will receive the greater of the money paid into the annuity or the cash value

The president of a company is starting an annuity and decides that his corporation will be the annuitant. which of the following statements is true? a. a corporation can be an annuitant as the beneficiary is a natural person b. the contract can be issued without an annuitant c. the annuitant must be a natural person d. a corporation can be an annuitant as long as it is also the owner

c. the annuitant must be a natural person

If a retirement plan or annuity is qualified, this means a. it is approved by the IRS b. it has a penalty for early withdrawal c. it accepts after-tax contributions d. it is noncancellable

a. it is approved by the IRS

All of the following are true of an annuity owner EXCEPT a. the owner must be the party to receive the benefits b. the owner pays the premiums on the annuity c. the owner has the right to name the beneficiary d. the owner is the party who may surrender the annuity

a. the owner must be the party to receive the benefits

Which of the following is TRUE regarding the accumulation period of an annuity? a. it is limited to 10 years b. it is a period during which the payments into the annuity grow tax deferred c. it is also referred to as the annuity period d. it is a period of time during which the beneficiary receives income

b. it is a period during which the payments into the annuity grow tax deferred

If the annuitant dies during the accumulation period, who will receive the annuity benefits? a. the annuitant's estate b. the beneficiary c. the annuity owner d. the insurance company

b. the beneficiary

Which of the following is true regarding a waiver of a surrender charge on an annuity contract? a. the surrender charge waiver only applies to immediate annuity b. the charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days c. the charge can only be waived if the annuitant needs the funds for medical expenses d. the surrender charge will be applied to all premature surrenders

b. the charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a a. deferred annuity b. pure annuity c. joint life annuity d. joint and survivor annuity

c. joint life annuity

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed? a. each contract's separate account b. the annuity owners account c. the insurance company's general account d. forwarded to an investor

c. the insurance company's general account

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? a. no payments b. annuity dividends c. full premium refund without any charges d. guaranteed surrender value

d. guaranteed surrender value

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy? a. joint and survivor b. life with period certain c. joint limited annuity d. joint life

d. joint life

Which of the following is NOT true regarding the annuitant? a. the annuitant's life expectancy is taken into the consideration for the annuity b. the annuitant receives the annuity benefits c. the annuitant must be a natural person d. the annuitant cannot be the same person as the annuity owner

d. the annuitant cannot be the same person as the annuity owner

All of the following statements are true regarding installments for a fixed amount except A the payments will stop when the annuitant dies B value of the account and future earnings will determine the time period for the benefits C this option pays a specific amount until the funds are exhausted D the annuitant may select how big the payments will be

A the payments will stop when the annuitant dies

What happens if a deferred annuity is surrendered before the annuitizarion period? A deferred annuities cannot be surrendered prior to the annuitization period B the owner will receive the surrender value of the annuity C the owner will receive a refund of premium D the insurer can only apply the surrender value toward another annuity

B the owner will receive the surrender value of the annuity

Which of the following best describes what the annuity period is? A the period of time during which accumulated money is converted into income payments B the period of time from the accumulation period to the annuitizarion period C the period of time during which money is accumulated in an annuity D the period of time from the effective date of the contract to the date of its termination

A the period of time during which accumulated money is converted into income payments

If an annuitant dies before the annuitizarion occurs, what will the beneficiary receive? A either the amount paid into the plan or the cash value of the plan, whichever is the greater amount B either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount C amount paid into the plan D cash value of the plan

A either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? A surrender B nonforfeiture C annuitization D bail out

D bail out

Which of the following is true regarding a waiver of a surrender charge on an annuity contract? A the charge can only be waived if the annuitant needs to funds for medical expenses B the surrender charge will be applied to all premature surrenders C the surrender charge waiver only applies to immediate annuity D the charge may be waived if the annuitant is confined to a long term care facility for at least 30 days

D the charge may be waived if the annuitant is confined to a long term care facility for at least 30 days

When must an IRA be completely distributed when a beneficiary is not named? a. due date of beneficiary's tax return including extensions b. December 31 of the year following the year of the owner's death c. due date of the deceased owner's final tax return including extensions d. December 31 of the year that contains the fifth anniversary of the owner's death

d. December 31 of the year that contains the fifth anniversary of the owner's death

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a. it will pay the benefit only for a designated period of time b. the payments are not guaranteed for life c. the insurer determines the amount for each payment d. it is a life contingency policy

d. it is a life contingency policy

Which of the following is not true about a joint and survivor annuity benefit option? A the surviving annuitant mat recurve reduced payments B payments stop after the first death among the annuitants C a period certain option may be selected D this option guarantees income for two or more receipients

B payments stop after the first death among the annuitants