Annuities

Pays a tax on the interest earned upon surrendering the annuity

annuitant

The monthly benefit of an annuity certain is determined by

annuitant's payout period selection

Type of contract liquidates an estate through recurrent payments

annuity

What is considered to be a characteristic of an immediate annuity

benefit payments start within one payment period of purchase

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

deferred

Start providing income payments after the first year

deferred annuities

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

fixed deferred

Pays out a fixed amount for life starting at a future date

fixed deferred annuity

Start providing income payments usually starting 30 days from the purchase date

immediate annuities

Has a single premium

immediate annuity

Purchased with single lump-sum payment and will start providing income payments within the first year, but usually start 30 days from purchase date

immediate annuity

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

immediate annuity

Payments are made to an annuitant for life

individual straight life annuity

A husband and wife are receiving annuity payments. When the husband dies, the wife still receives annuity payments for life

joint and survivor life annuity

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

life annuity with period certain

Required for a single premium annuity

lump-sum payment

Terry owns a 20 year life annuity certain and dies before the period of 20 years has elapsed. What happens to any monies left

paid to the beneficiary for the rest of the certain period

Kim has purchased a straight life annuity. What will this type of annuity provide her with?

periodic income for life

Kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. If she were to die, her beneficiary would continue receiving annuity payments until this amount has been received

refund life annuity

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

single premium

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n)

straight life annuity

John is an annuitant who has surrendered his annuity at age 55. What will he pay?

tax on the interest earned

An individual who purchases a life annuity is given protection against

the risk of living longer than expected

Type of annuity that has a cash value that is based upon the performance of it's underlying investment funds

variable