Life and Health Unit 9

The period during which a person receives the annuity benefits is called the A) accumulation period B) annuitization period C) payout period D) putting in period

B) annuitization period

All of the following are factors in determining a life annuity payout amount EXCEPT the A) annuitant's age B) beneficiary's age C) annuitant's gender D) payment guarantee

B) beneficiary's age

Fixed period and fixed amount are types of A) life annuities B) temporary annuities C) life-period certain annuities D) joint life annuities

B) temporary annuities

Tracey is paying money into an annuity she hopes will support her in her retirement years. Her contract currently is in which of the following periods? A) Accumulation period B) Nonforfeiture period C) Payout period D) Annuity period

A) Accumulation period This annuity is still in the accumulation phase or the "putting in" phase

Which of the following factors is NOT used to determine single premium immediate annuity premiums? A) Annuitant's retirement date B) Assumed interest rate C) Income amount and payment guarantee D) Applicant's sex

A) Annuitant's retirement date All of these factors, except the annuitant's retirement date, are used to determine single premium immediate annuity premiums

Which of the following types of annuities is guaranteed against loss and not tied directly to the stock market? A) Fixed B) Variable C) Market value adjusted D) Equity-indexed annuity

A) Fixed

Michele purchases an annuity that offers a guaranteed minimum interest rate and a guarantee against loss of principal if the contract is held to term. However, if the S&P 500 moves upward, Michelle's annuity might end up accruing more than the guaranteed minimum interest rate. Michelle has purchased A) an equity-indexed annuity B) a market value-adjusted annuity C) a market value-indexed annuity D) an equity-adjusted annuity

A) an equity-indexed annuity Michelle has purchased an equity-indexed annuity. The distinctive feature is that the interest rate credited to accumulated values is tied to stock

Under which annuity do the benefit payments begin within 12 months of the purchase? A) An immediate annuity B) a deferred annuity C) a retirement annuity D) An accumulated annuity

A) an immediate annuity

A tax favored retirement savings plan that people can set up themselves through a bank, securities firm, or insurance company is known as A) an individual retirement account (IRA) B) a savings account C) a term insurance policy D) a whole life insurance policy

A) an individual retirement account (IRA)

Under which of the following life annuity payout options do the payments stop when the first of two annuitants die and continue on to the survivor? A) Joint life B) Joint life and survivor C) Life only D) Life with period certain

A) joint life

Devon purchases an annuity that will pay a monthly income for the remainder of his life and then stop making payments. Devon has purchased A) a fixed annuity B) a straight-life annuity C) a variable annuity D) a temporary annuity certain

B) a straight-life annuity a straight-life annuity will pay a monthly income for the remainder of Devon's life and then stop making payments

Which type of annuity is most likely to provide death benefits if the insured dies during the accumulation period? A) Fixed annuity B) Variable annuity C) Deferred annuity D) Immediate annuity

C) Deferred annuity A death benefit is paid if the annuitant dies before the annuity payments begin. This is more likely to occur with a deferred annuity

All of the following statements about annuities benefits vs. life insurance benefits are correct EXCEPT A) annuities can be used to liquidate an estate B) annuities protect against living too long C) annuities protect against dying too soon D) annuities use a lump sum of accumulated money to guarantee income payments while living

C) annuities protect against dying too soon

Annuities exist to A) accumulate a sum of money B) distribute a lifetime income C) both accumulate a sum of money and distribute a lifetime income D) neither accumulate a sum of money nor distribute a lifetime income

C) both accumulate a sum of money and distribute a lifetime income Annuities address the risk of living too long while life insurance addresses the risk of dying too young

Fixed annuities are supported by the insurer's A) personal account B) separate account C) general account D) high risk investment accounts

C) general account

Albert has purchased an annuity that will pay him a monthly income for the rest of his life. If Albert dies before the annuity has paid back as much as he put into it, the insurance company has agreed to pay the difference to Albert's daughter. Albert has purchased a A) straight-life annuity B) life annuity with a period certain C) life with refund annuity D) temporary annuity

C) life with refund annuity Albert has purchased a life with refund annuity. The money will be paid either as a lump sum or a continuation of benefits

Which of the following is NOT a type of annuity product? A) fixed B) variable C) retirement D) equity-indexed

C) retirement

Which of the following types of annuities are regulated as securities? A) fixed annuities B) flexible annuities C) variable annuities D) structured annuities

C) variable annuities variable annuities are regulated as securities because the contract owner bears the investment risk

An annuity that guarantees a minimum rate of return is A) an immediate annuity B) a deferred annuity C) a variable annuity D) a fixed annuity

D) a fixed annuity A fixed annuity guarantees a minimum rate of return

Liz purchases an immediate annuity. The annuity contract must be a A) fixed annuity B) variable annuity C) deferred annuity D) single premium annuity

D) single premium annuity An immediate annuity is purchased with a single premium, and annuity payments begin one payout interval later