Chapter 11

Before he side, Gary received a total of $9200 in monthly incone payments from his $15000 straight life annuity. he also was the insured under a $25000 life insurance policy that named his wife, Darlene, as a primary beneficiary. considering the 2 contracts, Darlene would recieve death benefits totaling:

$25,000

which of the following statements regarding equity index contract is most correct?

Cash value of equity index contracts usually grow at a minimum interest rate.

which of the following statements about annuities is correct?

The amount of an individual's annuity payments depends on how much principle was invested, the amount of interest earned and the income period selected.

Ahen a cash value life insurance policy is converted into an annuity in a no taxable transaction, that event is generally known as a

1035 exchange

which of the following statements regarding annuity payout options is not correct?

In cash refund annuity, the annuitant's beneficiary always receives an amount equal to the beginning annuity fund plus all interest.

Joanna and her husband Tom have a $40000 annuity that pays them $200 a month. Tom dies and Joanna continue receiving the $200 monthly check as long as she lives. when she dies the company ceases payment. This is an example of:

Joint and full survivor annuity.

"Annuity payments are taxable to the extend that they represent interest earned rather than capital return."

Exclusion ratio

What annuity payout option provides for a life payment to the annuitant but guarantees a certain minimum term of payments, whether or not the annuitant is living?

Life with period certain.

All of the following statements about variable annuities are correct except:

Once a variable annuity has been annuititized, the amount if annuity income cannot fluctuate.