Annuities

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments

Which of the following is an annuity that is linked to a market-related index

Equity-indexed annuity

Which of these annuities require premium payments that vary from year to year?

Flexible premium deferred annuity

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

If the annuitant dies before the annuity start date,

The premiums paid plus interest earned will be given to the beneficiary

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?

Accumulation period

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called

Annuity certain

Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them?

Life annuity certain

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?

Premiums paid plus interest earned is returned to the beneficiary

Which annuity payout option allows the policy owner to choose a pre-determined number of benefit payments

Period certain

Which of the following is considered to be the period when the accumulated value in an annuity is paid out?

Annuitization phase

Under a non-qualified annuity, interest is taxed after the

Exclusion ratio has been calculated

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

Guaranteed lifetime withdrawal benefit

Fixed annuities provide each of the following EXCEPT

Hedge against inflation

Which of these statements regarding the annuitant is CORRECT

The annuitant's life expectancy determines the annuity payments