Chapter 5 Annuities (10 Questions on Exam)

Variable insurance and variable annuities are regulated by

SEC, FINRA and Department of Insurance

Who bears the investment risk in the fixed annuity

The insurance company

An annuity that guarantees a minimum rate of return is known as?

Fixed annunity

Which of the following is NOT true regarding an annuity certain?

Benefits will stop at the annuitants death

An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need?

Deferred

Annuities may be purchased with all of the following payment methods EXCEPT

Deferred

Which type of annuity settlements stops with at the annuitant dies?

Life annuity

What does an annuity protect the contract owner against?

Living longer than expected

Which of the following has the right to surrender a deferred annuity contract?

The annuity owner

Which of the following statements is TRUE about annuities

They can provide a lifetime income

Annuities can be used for the the following EXCEPT

To create an estate

When an annuity is written, whose life expectancy is taken into account?

Annuitant

The time period during which an annuitant contributes to an annuity is called?

The accumulation period

An annuity begins payments to the annuitant one month after it is purchased. Why type is it?

Single premium immediate annuity

All other factors being equal, which of the following types os annuities will provide the highest monthly income?

Straight Life