Primerica-Annuities

The annuity purchased with multiple payments, whose benefit is paid more than one year after the purchase is known as which type of annuity? a. Flexible Premium Deferred Annuity b. Single Premium Immediate Annuity c. Flexible Premium Immediate Annuity d. Single Premium Deferred Annuity

a. Flexible Premium Deferred Annuity-FPDA purchased with multiple payments, and benefit payments begin sometime after one year from the date of purchase

How long will a life annuity with an installment refund pay? a. until the balance of the initial premium is paid out in a lump sum to the beneficiary after the annuitant dies b. until the balance of the initial premium is paid out in a continued payments to the beneficiary after the annuitant dies c. for guaranteed 20 years d. only until the annuitant dies

b. until the balance of the initial premium is paid out in a continued payments to the beneficiary after the annuitant-life annuity with an installment refund will pay for the life of the annuitant or if the annuitant dies before the full initial premium has been paid out, guaranteed payments will continue to the beneficiary until the entire premium amount is paid

An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 3%. During an economic downswing, the investments only drew 2.5%. What interest rate will the insurer pay to its policyholders? a. 3% regardless of what the investment draws since that's the guaranteed rate b. 2.5% c. 3% d. 3% this payment. The over payment this time will be subtracted from the next time the rate exceeds the 3%

c. 3%- Insurance companies promise guaranteed minimums on the fixed annuities (3% in this scenario). This means that if the investments draw less than 3% the company will have to pay 3% anyway. If the investments earn over 3%, the company will pay that excess.

Which of the following statements regarding annuities is correct? a. deferred annuities pay a lump sum at retirement b. annuities are not suitable for retirement c. annuities provide income that the annuitant cannot outlive d. annuities are for business use only

c. annuities provide income that the annuitant cannot outlive-the main purpose of an annuity is to accumulate funds funds and eventually provide income. Annuities are most commonly used to provide retirement income.