Life XIV Life ANNUITIES
What are accumulation units converted to upon annuitization of a Variable Annuity? A. Variable units B. Nothing C.There is not enough information to calculate D. Annuity Units
Annuity Units
What is an annuity option that returns the difference between an annuity's value and the income payments made to a beneficiary, when an annuitant dies during the distribution period? A. Pre-Annuity Refund B. Variable Refund C. Liquidated Refund D. Cash Refund
Cash Refund
What do accumulation units of Variable Annuities convert into upon annuitization? A. They do not covert B. Premium units C. Annuity units D. Dividends
Annuity units
Producers must obtain information about a consumer in order to make a professional annuity recommendation. Which of the following would not be an acceptable relevant source of information needed by the producer? A. Tax background B. Income C. Beneficiary's age D. Financial Status
Beneficiary's age
Bill has a Variable Annuity with XNY Company. Who bears the investment risks regarding the policy? A. Primary beneficiaries B. Bill C. XNY Company D. The Stockholders
Bill
If an annuitant dies before annuitization occurs, what will the beneficiary receive? A. Cash value of the plan B. Amount paid into the plan C. Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount D. Either the amount paid into the plan or the cash value of the plan whichever is the greater amount.
Either the amount paid into the plan or the cash value of the plan whichever is the greater amount.
What type of annuity has a guaranteed interest rate and is conservatively invested? A. Fixed B. Market C. Variable D. Equity
Fixed
where are Fixed Annuity premium payment invested?
General Account
What kind of annuity option guarantees to pay pay the total amount equal to the purchase price to a living to a living annuitant? A. Pure life Annuity B. Cash Refund Annuity C. Installment Refund Life Annuity D. Life with Guaranteed Minimum Annuity
Installment Refund Life Annuity
The annuity owner may change the annuity date, the settlement option and even the beneficiary, but cannot change the ............... date.
Issue
Which of the following describes the effect of the market value adjustment in a market value adjustment annuity? A. It provides the annuitant to adjust their investment rate B. It transfers part of the investment risk to the policy owner C. There is no effect D. It transfers the investment risk to the contingent beneficiary for 3 years
It transfers part of the investment risk to the policy owner
Tim is an agent with J&F Insurer. He needs to obtain certain information from his client in order to recommend an annuity product. which of the following does not need to be obtained? A. Age B. Income C. Financial status D. Marital status
Marital status
An Individual Straight Life Annuity is correctly associated with which of the following statements? A. Payments are made to an annuitant for life B. An annuitant's life expectancy is not a characteristic of the annuity C. Payments from the annuity are tax free when received D. The annuity is for non-profit organizations
Payments are made to an annuitant for life
Which of the following is not a factor used in determining the suitability of an annuity? A. Income B. Age C. Tax rate D. Residence
Residence
Sonny has an indexed annuity. What is its rate of return linked to in the market index? A. NAIC B. Mutual bonds C. S & P 5000 D. Poors
S & P 5000
Variable annuity premiums are invested in ...................... .................. during the accumulation period.
Separate accounts
what kind of premium is associated with an immediate annuity? A. Modified B. Adjusted C. Variable D. Single
Single
A Pure Life Annuity is also known as a : A. Life with Certain Annuity B. Straight Life Annuity C. Adjustable Life Annuity D. Refund Life Annuity
Straight Life Annuity
Which of the following best describes the interest paid during an annuity's payout time? A. Not taxable B. Is capital gains and taxable C. Tax deductible D. Taxable as ordinary income
Taxable as ordinary income
Who can surrender a deferred annuity? A. The annuity owner B. It depends on the amount of the annuity C. Beneficiary D. No One
The annuity owner
Who bears all of the investment risk in a fixed annuity? A. The insurance company B. The beneficiary C. The owner D. The annuitant
The insurance company
Which of the following does not apply to an annuity owner? A. The owner may surrender the annuity B The owner must be the party to receive benefits C. The owner names the beneficiary D. The owner always pays the premiums
The owner must be the party to receive benefits
Goober's Furniture wants to purchase an annuity. As Goober's agent, you should alert Goober to the fact that an annuity cannot be used as an investment vehicle to defer taxes on company assets. True or False A. True B. False
True
Which type of annuity reflects varying economic and market conditions? A. Fixed B. Variable C. Separate D. General
Variable
Which contract liquidates an estate by recurrent payments? A. Bonds B. Annuity C. Whole Life D. TSA
Annuity
Ben has a deferred annuity. How soon will his payments begin? A. At any time after the purchased it B. Anytime within 12 months of its purchase C. Anytime within 6 months of its purchase D. At least 12 months after it was purchased
At least 12 months after it was purchased
Which type of annuity has a guaranteed interest rate and benefits?
Fixed
Under Fixed Annuity contracts, the party who assumes the investment risk is the: A. Annuitant B. Contractor C. Beneficiary D. Insurer
Insurer
What is taxed on a lump sum Annuity Settlement amount?
Interest
An annuity with a bailout provision allows the annuitant to surrender the annuity without penalty if the .............. .................... goes below a stated value.
Interest Rate
Under a Straight Life Annuity, if an annuitant dies before the principal amount is paid out, the beneficiary will receive which of the following? A. Guaranteed minimum benefit B. Nothing; the payments will cease C. The remainder of the principal D. The amount paid into the annuity
Nothing; the payments will cease
What isn't considered in a single premium annuity? A. Gender B. Premium Amount C. Attained Age D. Number of dependents
Number of dependents
A (n)........................... ...................... has values that grow and fluctuate in relationship to the performance of the stock market.
Variable Annuity
With a single Premium Deferred Annuity (SPDA), when are the benefits paid? A. When an owner retires B. When the owner turns 100 C. After the death of an owner D. After more than one year
After more than one year
What is the advantage of having a qualified group annuity? A. There is no advantage B. An employer receives a tax deduction for their contributions C. Higher dividends D. Receiving a lump-sum settlement tax free
An employer receives a tax deduction for their contributions
A Variable annuity policy owner must be notified of accumulated value in which time? A. Monthly B. Annually C. Twice a year D. Only by request
Annually
What is the person whose life an annuity has been issued called?
Annuitant
Which of the following is a true relationship between an annuity and a life insurance Policy? A. Both provide income for life B. Both use Mortality Table C. Both are insurance products D. Both use a Prime Factorization Table
Both use Mortality Table
What kind of an annuity option will pay a lump sum amount that is the difference between an annuity's value, and its income payments, to a beneficiary upon annuitant's death? A. Variable B. Cash Refund C. Installment for a Fixed Period D. Straight Life
Cash Refund
What are individual certificates under a Group annuity Called? A. Certificates of Participation B. Certificates of Coverage C. Certificates of Authorization D. Certificates of Insurance
Certificates of Participation
Joan is a producer that is considering the suitability of an annuity recommendation for a consumer. Which of the following must she consider? A. Return rate B. Poor's rating C. Financial status D. Interest earned
Financial status
Which of the following is not a feature of a Straight Life annuity? A. No death benefit B. Gender and age are factors of income amount C. The beneficiary will receive a refund if the annuitant dies during the pay-out phase. D. Payments will continue until the annuitant dies
The beneficiary will receive a refund if the annuitant dies during the pay-out phase.
Equity Indexed Annuities: A. Are security instruments B. Seek higher returns than fixed Annuities C. Are more risky than Variable Annuities D. Are invested conservatively
Seek higher returns than fixed Annuities
Which of the following is NOT a term for the period of time during which an annuitant is making payments or investments in their annuity? A. Deferred period B. Annuitization C. Accumulation D. Pay in Period
Annuitization
Mr. Simms has a Variable Annuity. He is required to be notified about his annuity's accumulated value. When must this occur? A. Only upon request B. At least once each year C. Each month D. Bi-annually
At least once each year
A Variable Annuity has a payout that is : A. Contingent upon the profitability of its investment portfolio B. Guaranteed in the contract C. The same from one payment to the next D. Tied to an index like S&P 500
Contingent upon the profitability of its investment portfolio
Which is correct regarding a Variable Annuity? A. Investment are always conservative B. Annuitant bears the risk C. Stockholders bear the risk D. The company bears the risk
Annuitant bears the risk
What feature applies to a Deferred Annuity? A. Income payments begin sometime after a year B. Income payments begin after three years C. Income installments begin the same time as a Straight Life Annuity D. Income installments begin immediately
Income payments begin sometime after a year
What do annuity units represent? A. Shares in an investment account and are invested in the stock market B. Cash value C. Market separate account values D. Guaranteed values
Shares in an investment account and are invested in the stock market
............................ annuities are invested in securities, hopefully maintaining a constant purchasing power, as protection against inflation. A. Separate B. Variable C. Guaranteed D. General
Variable
Who selects the length of the period in an annuity type with Installments for a Fixed Amount?
The Insurer
Ann is very concerned about the surrender of her deferred annuity before its annuitization period. Which of the following will most likely happen? A. Nonforfeiture option will guarantee that Ann will receive a surrender value of her contract B. The funds will be forfeited C. Ann will be penalized 50% of its value D. Ann will only receive 50% of the funds
Nonforfeiture option will guarantee that Ann will receive a surrender value of her contract