Annuities
The number of payments that purchase the annuity
What is the difference between a single premium and a flexible premium payment options in a deferred annuity?
To provide income that the annuitant cannot outlive
What is the main reason for purchasing an annuity?
Immediate annuity
What type of annuity can be purchased with a single premium?
Equity Indexed Annuity
What type of annuity credits its interest based upon an index such as Standard and Poors 500?
Straight life
What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?
Variable annuity
What type of annuity requires an agent to have a securities license?
A life insurance license and a securities license
What type of license(s) is/are required in order to sell variable annuities?
The insurer
Who bears the investment risk in a fixed annuity?
Annuity owner
Who possesses all the rights in an annuity?
Annuitant
Who receives income payments from an annuity?
Annuitant
Whose life expectancy is taken into consideration in an annuity contract?
No sooner than 1 year after the annuity purchase
With a single premium deferred annuity, when will the annuity payments become available?
In times of inflation, the benefit of a fixed annuity will have decreased purchasing power
What is a disadvantage of owning a fixed annuity, as opposed to variable?
Cash refund and installment refund
What are two types of refund life annuities?
The annuity's underlying ivestements
What causes a variable annuity benefit to vary?
Flexible premium deferred annuity
An annuity purchases with multiple payments that begins income payments after one year from the moment of purchase is known as what type of annuity?
Annuity
An individual has a contract that will provide him with a certain amount of income for the rest of his life. This is not, however, a life insurance policy. What type of contract does this person have?
No, an annuitant must always be a natural person
Can a business or corporation be an annuitant?
Single life and multiple life annuities
How are annuities classified depending on how much lives they cover?
Only for the life of the annuitant
How long is income paid under a pure life annuity?
For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments will last for 15 years.
How long will a life annuity with 15-year period certain pay?
No later than 1 year from the time of annuity purchase
How soon can income payments begin in an immediate annuity?
Joint life annuity
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
Either the amount paid into the annuity or the cash value, whichever is greater.
If the annuitant dies before the annuitization period starts, what will the beneficiary receive?
Beneficiary
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
Current
If the current interest rate on an annuity is higher than the guaranteed rate, which rate will the annuity owner receive as part of the annuity payment?
Annuitant's estate
If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?
Annuatization period
In an annuity, the accumulated money is converted into a stream of income during which phase?
Amount of premium
In flexible premium payment annuities, the term 'flexible' refers to what?
Life income with period certain
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?
Pure life
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and ceases at the annuitant's death?
Ownership interest in the separate account
What are accumulation units in annuities?
Immediate and deferred
What are the two classifications of annuities according to the time when annuity payments begin?
Accumulation and annuitization (or pay-in and pay-out)
What are the two phases of an annuity?
