Annuities (Ch.5)

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Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

$50,000 (Because of policy, payments would cease AFTER annuitants death, not go to spouse)

How long is the right to examine period for new individual annuities issued in PA?

10 days

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

An annuitant must be a natural person

The current interest rate on an equity-indexed annuity is often based on

An index like S&P 500

Which of the following is a short term annuity that limits the amount paid to a specific fixed period or until liquidated?

Annuity certain

After 3 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? a) Inflation adjustment b) Surrender charge c) Termination penalty d) Bail out charge

B) Surrender charge

An agent selling variable annuities must be registered with

FINRA

Why is an equity indexed annuity considered a fixed annuity?

It has a guaranteed minimum interest rate

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

Joint life annuity

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called

Life income with period certain

Which of the following can surrender a deferred annuity contract?

Only the annuity owner

All of the following statements are true regarding installments for a fixed amount EXCEPT:

The payments will stop when the annuitant dies: This is false because there are no life contingencies on a fixed amount option

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into an income stream


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