Life Insurance: Annuities Quiz
An insurance company forwards fixed annuity premiums to the general account, where the money is invested. The guaranteed minimum interest at 2.5%. During an economic downswing, the investments only true 2%. What interest-rate will the insurer pay to its policy owners?
2.5%
All of the following information about a customer must be used in determining annuity sustainability EXCEPT
Beneficiaries age
Which of the following is a feature of variable annuity?
Benefit payments are not guaranteed
Which of the following is not true regarding the annuitant?
Cannot be the same person as the annuity owner
Which of the following is not fundable by annuities?
Death benefits
An agent selling variable annuities must be registered with
FINRA
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?
Guaranteed surrender value
According to the nonforfeiture law, if the owner decides to surrender deferred annuity prior to annuitization, the owner is entitled to which of the following?
Guaranteed surrender value
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
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
Which of the following is not true about a joint and survivor annuity benefit option?
Payment stop after the first death among the annuitants
All of the following statements are true, regarding installments for a fixed amount, except
Payments Will stop when the annuitant dies
Which of the following best describes what the annuity period is?
Period of time during which the accumulated money is converted into income payments
Annuities can be used to fund which of the following?
Retirement plans
Equity, indexed annuities
Seek Higher returns
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risk on investment
Which of the following is true regarding variable annuities?
The annuitant assumes the risk on investment
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is the money placed?
The insurance company's general account
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive the surrender value of the annuity
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
Which of the following best describes what an annuity period is?
The period of time during which the accumulated money is converted to income payments
Which of the following is not true regarding equity indexed annuities?
They earn lower interest rates than fixed annuities
Which of the following is not true regarding equity, indexed annuities?
They earn lower interest rates than fixed annuities
Which of the following is true for both equity, indexed, annuities, and fixed annuities?
They have a guaranteed minimum interest rate
Which of the following products requires a securities license?
Variable Annuity
Which of the following products requires a securities license?
Variable annuity
In an annuity, the accumulated money is converted into a stream of income during which time period?
Annuitization period
Which of the following provisions in annuity contracts about the owner to surrender the annuity if interest rates drop to specified level?
Bail-out
Which of the following will not be an appropriate use of a deferred annuity?
Creating an estate
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint Life
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest rate for a specific period of time
Under which installments option does the annuitant select the amount of each, and the insurer determines how long they will pay benefits?
Fixed amount
The following best describes a bail-out provision?
It allows the owner to surrender the annuity without a charge
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed
An annuity owner is spending an annuity that will supplement her retirement. Because she does not know what affect inflation may have her retirement dollars, she would like it returned that will equal the performance of the Standard & Poor's 500 index. She would likely purchase a(n)
Equity indexed annuity
Annuity owner is funding an annuity that will supplement her retirement. Because she does not know what affect inflation be having her retirement dollars, she would like to return that will equal the performance of the Standard & Poor's 500 index. She would likely purchase a(n)
Equity, indexed annuity
Which of the following is true regarding the waiver of surrender on an annuity contract?
The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days
Which of the following is true regarding a waiver of a surrender charge on a annuity contract?
The charge may be waived if the annuitant is confirmed to a long-term care facility for at least 30-days
All of the following statements about equity, indexed annuities are correct, except
The new intent receives a fixed amount of return
All of the following statements are true, regarding installments for a fixed amount, except
The payments will stop on the annuitant dies
All of the following statements are true, regarding installments for a fixed amount EXCEPT
The payments will stop in the annuitant dies
The following statements are true regarding installments for a fixed. Annuity settlement option, except.
It is a life contingency option
Which of the following is true regarding the accumulation period of an annuity?
It is a period during which the payments into the annuity grow tax deferred
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant
Which of the following is not true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
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?
The annuitant must be a natural person
In a fixed annuity, which of the following is true, regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate
What determines the penalty for surrendering a market value adjusted annuity prematurely?
The current rate at the time of surrender
All of the following are true of an annuity owner, except
The owner must be the party to receive benefits
If the annuitant Dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
Which of the following is not a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is true?
The beneficiary will receive the greater amount of the money paid into the annuity or the cash value
The minimum interest rate on equity indexed annuity is often based on
An index like Standard & Poor's 500
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?
Bail-out
What license or licenses are required to sell variable annuities?
Both a life insurance license, and a securities license
Under which of the following annuity options, does the annuitant select the time. For the benefits, and the insured determines how much each payment will be?
Installments for a fixed
Under which of the following annuity options, does the annuitant select the time period for the benefits, and the insured determines how much each payment will be?
Installments for a fixed period
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?
Insurer's guaranteed minimum rate of interest
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
All of the following are true regarding installments for a fixed period annuity settlement option EXCEPT
It is a life contingency option
Which of the following is true regarding the annuity period?
It may last for a lifetime of the annuitant
Which of the following is not true regarding accumulation period of an annuity?
It would not occur in a deferred annuity
A couple near retirement is planning for the golden years. They want to make sure their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?
Joint and survivor
Which two terms are associated directly with the way and annuity is funded?
Single payment or periodic payments
The annuity owner dies during the accumulation period without naming a beneficiary. Annuities, cash value exceeds premiums paid. Which of the following is TRUE?
The cash value will be paid to the annuitant estate
All of the following are true of an annuity owner, EXCEPT
The owner must be the party to receive benefits
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies