Unit 9
Albert has purchased an annuity that will pay him a monthly income for the rest of his life. If Albert dies before the annuity has paid back as much as he put into it, the insurance company has agreed to pay the difference to Albert's daughter. Albert has purchased a
life with refund annuity
Which of the following factors is NOT used to determine annuity premiums?
Annuitants retirement date
Which of the following types of annuities is guaranteed against loss and not tied directly to the stock market?
Fixed
Under which of the following life annuity payout options do the payments stop when the first of two annuitants die and not continue on to the survivor?
Joint life
Which of the following is NOT a type of annuity product?
Retirement
Which of the following types of annuities are regulated as securities
Variable annuities
An annuity that guarantees a minimum rate of return is
a fixed annuity
Devon purchases an annuity that will pay a monthly income for the remainder of his life and then stop making payments. Devon has purchased
a straight-life annuity
Liz purchases an immediate annuity. The annuity contract must be a
single premium annuity
Fixed period and fixed amount are types of
temporary annuities
Which type of annuity is most likely to provide death benefits if the insured dies during the accumulation period?
Deferred annuity
A tax favored retirement savings plan that people can set up themselves through a bank, securities firm, or insurance company is known as
an individual retirement account (IRA)
All of the following statements about annuities benefits vs. life insurance benefits are correct EXCEPT
annuities protect against dying too soon
The period during which a person receives the annuity benefits is called the
annuitization period
All of the following are factors in determining a life annuity payout amount EXCEPT the
beneficiary's age
Annuities exist to
both accumulate a sum of money and distribute a lifetime income
Fixed annuities are supported by insurers
general account
Tracey is paying money into an annuity she hopes will support her in her retirement years. Her contract currently is in which of the following periods?
Accumulation period
Under which annuity do the benefit payments begin within 12 months of the purchase?
An immediate annuity
Michelle purchases an annuity that offers a guaranteed minimum interest rate and a guarantee against loss of principal if the contract is held to term. However, if the S&P 500 moves upward, Michelles annuity might end up accruing more than the guaranteed minimum interest rate. Michelle has purchased
an equity-indexed annuity