Annuites

Variable annuities may invest premiums in each of the following, EXCEPT:

Insurer's corporate business account

Which these statements concerning an individual straight life annuity is accurate

Payments are made to an annuitant for life

Which type of contract liquidates an estate through recurrent payments?

Annuity

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

Deferred

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

Single premium immediate joint with survivor annuity

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

Straight life annuity

The type of annuity that can be purchased with one monetary deposit is called a(n)

immediate annuity

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

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

Income that cannot be outlived by the owner

What is considered to be a characteristic of an immediate annuity?

benefit payments start within one payment period of purchase

How does an indexed annuity differ from a fixed annuity?

indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

which of the following is not included in an annuity contract?

AD & D rider

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Life annuity with period certain

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

The current contract surrender value

An individual who purchases a life annuity is given protection against?

The risk of living longer than expected

What is the basic function of annuity?

The systematic liquidation of accumulated funds

A variable annuity has which of the following characteristics?

Underlying equity investment

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

Variable

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

Immediate annuities

A 45 year old woman won 100,000 in a scratch-off lottery ticket. she purchased an annuity that will pay her 1,500 per month beginning at age 60. Which of these annuities did this woman purchase?

Deffered fixed annuity

Which of these is an element of a single premium annuity

Lump-sum payment

which of the following are equity indexed annuities typically invested in?

S&P 500