Annuity Basics and Definitions Chapter Quiz

A deferred annuity is commonly utilized to pay for A. A retirement income B. The balance on a mortgage C. A funeral D. Debts at death

A. A retirement income

Which of the following is NOT one of the factors used in classifying an annuity? A. The method used to contribute funds to annuity B. The date the annuity was purchased C. The method used to distribute funds the annuitant D. The date the annuity payments begin

B. The date the annuity was purchased Annuities are classified by the method used to fund the annuity, the annuity payment method, the date the annuity payments begin, and the underlying investment configuration of the annuity.

If an annuitant dies before annuitization occurs, what will the beneficiary receive? A. Only the amount paid into the annuity B. Only the cash value of the annuity C. Either the amount paid into the annuity or the cash value, whichever is the greater amount D. Either the amount paid into the annuity or the cash value, whichever is less

C. Either the amount paid into the annuity or the cash value, whichever is the greater amount

The annuity purchased with the multiple payments, whose benefit is paid more than one year after the purchase is known as which type of annuity? A. Flexible premium immediate annuity B. Single premium deferred annuity C. Flexible premium deferred annuity D. Single premium immediate annuity

C. Flexible premium deferred annuity

Which of the following is NOT true regarding the annuitant? A. The annuitant receives the annuity benefits. B. The annuitant must be a natural person C. The annuitant cannot be the same person as the annuity owner. D. The annuitant's life expectancy is taken into consideration for the annuity

C. The annuitant cannot be the same person as the annuity owner.