annuities

Annuities can be used to fund which of the following? AEstate creation BRetirement plans CVariable life insurance DGroup life insurance

b

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT AThe insurer determines the amount for each payment. BIt is a life contingency option. CIt will pay the benefit only for a designated period of time. DThe payments are not guaranteed for life.

b

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy? ALife with period certain BJoint limited annuity CJoint life DJoint and survivor

c

After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called? ABail-out charge BInflation adjustment CSurrender charge DTermination penalty

c

Which of the following is TRUE regarding the accumulation period of an annuity? AIt is also referred to as the annuity period. BIt is a period of time during which the beneficiary receives income CIt is limited to 10 years. DIt is a period during which the payments into the annuity grow tax deferred.

d

Which of the following is a true comparison between annuities and life insurance? AAnnuities serve the same function as life insurance. BBoth provide a lifetime income. CNeither annuities nor life insurance subject to income taxes. DBoth annuities and life insurance use mortality tables.

d

All of the following information about a customer must be used in determining annuity suitability EXCEPT AFinancial experience. BAnnual income. CBeneficiary's age. DTax status.

c

Which of the following is NOT fundable by annuities? AA person's retirement BEstate liquidation CDeath benefits DCash accumulation for any reason

c

What happens if a deferred annuity is surrendered before the annuitization period? AThe insurer can only apply the surrender value toward another annuity. BDeferred annuities cannot be surrendered prior to the annuitization period. CThe owner will receive the surrender value of the annuity. DThe owner will only receive a refund of premium.

c

Which of the following will NOT be an appropriate use of a deferred annuity? AAccumulating funds in an IRA BFunding a child's college education CCreating an estate DAccumulating retirement funds

c

If the annuitant dies during the accumulation period, who will receive the annuity benefits? AThe annuitant's estate BThe beneficiary CThe annuity owner DThe insurance company

b

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? ACash refund BInstallments for a fixed period CInstallments for a fixed amount DInstallment refund

b

Which of the following is true regarding a waiver of a surrender charge on an annuity contract? AThe surrender charge waiver only applies to immediate annuity. BThe charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days. CThe charge can only be waived if the annuitant needs the funds for medical expenses. DThe surrender charge will be applied to all premature surrenders.

b

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity? AStatewide predetermined annual interest rate BInsurer's guaranteed minimum rate of interest CInvestment performance of the company DInvestment performance of the insured

b

An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders? A2% B2.5% C3% DWhatever interest rate the company deems appropriate

b

Which of the following is true regarding a market value adjusted annuity? AIt provides a level benefit payment. BThe owner is guaranteed a fixed interest rate for a specific period of time. CThe insurer bears all the market risk of changing interest rates. DThere are no penalties for a premature surrender of the annuity.

b

Which of the following is another term for the accumulation period of an annuity? APremium period BLiquidation period CAnnuity period DPay-in period

d

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed? AEach contract's separate account BThe annuity owner's account CThe insurance company's general account DForwarded to an investor

c

Which of the following best describes a bail-out provision? AIt allows the owner to receive a higher interest rate at certain timeframe. BIt decreases the annuity surrender value. CIt allows the owner to surrender the annuity without a charge. DIt waives the surrender charge for the annuitants confined to a long-term care facility.

c

Which of the following is NOT true regarding Equity Indexed Annuities? AThey have guaranteed minimum interest rates. BThey are less risky than variable annuities. CThey earn lower interest rates than fixed annuities. DThe insurance company keeps a percentage of the returns.

c

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? ANo payments BAnnuity dividends CFull premium refund without any charges DGuaranteed surrender value

d

All of the following statements are true regarding installments for a fixed amount EXCEPT AValue of the account and future earnings will determine the time period for the benefits. BThis option pays a specific amount until the funds are exhausted. CThe annuitant may select how big the payments will be. DThe payments will stop when the annuitant dies.

d

The current interest rate on an equity indexed annuity is often based on AThe returns from the insurance company's separate account. BThe annuitant's individual stock portfolio. CThe insurance company's general account investments. DAn index like Standard & Poor's 500.

d

Which of the following is NOT true regarding the accumulation period of an annuity? AIt is the period during which the annuity payments earn interest. BIt is the period over which the owner makes payments into an annuity. CIt is also known as the pay-in period. DIt would not occur in a deferred annuity.

d

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a ADeferred annuity. BPure annuity. CJoint life annuity. DJoint and survivor annuity.

c

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? AThe annuitant will receive the lower of either the guaranteed minimum rate or current rate. BThe annuitant will only receive the guaranteed minimum specified in the contract. CThe annuitant will receive the higher of either the guaranteed minimum rate or current rate. DThe annuitant will always receive the current interest rate.

c

When an annuity is written, whose life expectancy is taken into account? ABeneficiary BLife expectancy is not a factor when writing an annuity. COwner DAnnuitant

d

If an annuitant dies before annuitization occurs, what will the beneficiary receive? ACash value of the plan BEither the amount paid into the plan or the cash value of the plan, whichever is the greater amount CEither the amount paid into the plan or the cash value of the plan, whichever is the lesser amount DAmount paid into the plan

b