Annuities (ch. 5)

25 year old wants to take measures now to make sure that after retirement, he will have a good income. What would help to do this?

An annuity

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

Annuity owner dies while annuity is still in the accumulation stage.

Beneficiary will receive the greater of the money paid into the annuity or the cash value

What license or licenses are required to sell variable annuities?

Both a life insurance license and a securities license

Under which annuity option does the annuitant select the time period for the benefits and the insurer determines how much each payment will be?

Installments for a fixed period

an annuity owner

Does not have to be the party to receive benefits

True regarding annuity period

It may last for the lifetime of the annuitant

Best describes difference between Pure Life and Life with Guaranteed Minimum settlement options?

Life with Guaranteed Minimum will pay the remaining principal to the beneficiary

Group annuity CANNOT

Owned by individual employees

Another term for the accumulation period of an annuity

Pay-in period

Characteristic an annuity has to have if it is used to accumulate funds in an IRA

Tax qualified

Annuity owner dies and cash value exceeds the premiums he paid. There is no named beneficiary. Which is true?

The cash value will be paid to the annuitant's estate

True regarding a modified guaranteed annuity

The owner is guaranteed a fixed interest rate for a specific period of time

Option for Installments for a fixed amount that Is not true

The payments will stop when the annuitant dies

Which product requires a securities license?

Variable annuity