Annuities

IRS

(Internal Revenue Service) Governmental agency responsible for collecting federal taxes, issuing regulations, and enforcing tax laws

Qualified plan

A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

Which of the following is NOT true regarding an annuity certain ?

Benefits stop at the annuitant's death

Which type of annuity settlements stops when the annuitant dies ?

Life annuity

suitability

a requirement to determine if an insurance product is appropriate for a customer

Who bears the investment risk in a fixed annuity?

the insurance company

Deferred

withheld or postponed until a specified time or event in the future

And individual inherited a large sum of money at the age of 40 and wanted to use it to provide a guaranteed income for his retirement at 60. Which of the following types of annuities would best meet this need

Deferred

Annuities may be purchased with all of the following payment methods EXCEPT

Deferred

Life contingency

Dependent upon whether or not the insured is alive

An annuity that guarantees a minimum rate of return is known as a/an

Fixed annuity

What does an annuity protect the contract owner against?

Living longer than expected

Which of the following has the right to surrender a deferred annuity contract?

Only the annuity owner

Variable Insurance and variable annuities are regulated by

SEC , FINRA , and Departments of Insurance

An annuity begins payment to the annuitant one month after its purchased. What type is it?

Single premium immediate annuity

All other factors being equal , which of the following types of annuities will provide the highest monthly income ?

Straight life

The time period during which an annuitant contributes to an annuity is callled

The accumulation period

Which of the following statements is true about annuities?

They can provide lifetime income

Annuities can be used for all of the following reasons EXCEPT

To create an estate

When an annuity is written, whose life expectancy is taken into account?

Annuitant

Liquidation of an estate

converting a person's net worth into a cash flow

Natural person

human being