Annuities

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

Which of the following factors is NOT used to determine annuity premiums?

Annuitant's retirement date

Which type of annuity is most likely to be used to distribute lottery winnings?

Single premium, temporary annuity with amount certain,

Which of the following is a purpose of the annuity?

The distribution of a lifetime income

An annuitant is receiving monthly income from the annuity contract. Which period is the annuitant in?

annuity period

Marcus 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 Nasdaq moves upward, Marcus's annuity might end up accruing more than the guaranteed minimum interest rate. Marcus has purchased a(n)

equity-indexed annuity

An annuity that guarantees a minimum rate of return is a(n)

fixed annuity

An annuity might be called the flip side of

life insurance

Which of the following types of annuities are regulated as securities?

Variable annuities

Which of the following is a unique characteristic of variable annuities?

Variable annuities' growth varies according to investment performance

Annuities exist to

both accumulate a sum of money and distribute a lifetime income

Eric purchased an annuity with favorable rates. However, because of unforeseen circumstances, he needs to surrender the annuity. If the market has gone up, Eric will need to pay a higher surrender charge than if the market has gone down. Eric owns a(n)

market value-adjusted annuity

Annuities are a mechanism for transferring to an insurance company the risk of

outliving financial resources

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

refund life annuity

Liz purchases an immediate annuity. The annuity contract must be a

single premium 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