CHAPTER 7 EXAM: Annuities

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

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

the current contract surrender value

what type of annuity has a cash value that is based upon the performance of its underlying investment funds?

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

what is the basic function of an annuity?

The systematic liquidation of accumulated funds

which of the following is NOT included in an annuity contract? nonforfeiture benefit free-look period beneficiary AD&D rider

All of these are included in an annuity contract EXCEPT an Accidental Death & Dismemberment (AD&D) rider.

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 fixed deferred annuity pays out a fixed amount for life starting at a future date

all of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT income derived from the TSA is received income tax-free TSA's are available to public school employees contributions to the TSA are tax-deductible interest earned by TSA is tax deferred

income derived from the TSA is received income tax-free upon retirement, payments received by employees from the accumulated savings in tax-sheltered annuities are treated as orindary income

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 promises that if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid.

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

straight life annuity pays the largest monthly benefit to a single annuitant because it is based only on life expectancy, but it creates a risk that the annuitant may die early and forfeit much of the value of the annuity to the insurance company

an individual who purchases a Life annuity is given protection against:

the risk of living longer than expected

a variable annuity has which of the following characteristics?

underlying equity investments


Kaugnay na mga set ng pag-aaral

Forms of Real Estate Ownership: Unit 5

View Set

Long Term Care Master Study Guide

View Set

Hesi adaptive quizzing respiratory

View Set