Chapter 2

A man purchased a $90,000 annuity with a single premium and began receiving payments 2 months after that. What type of annuity is it?

Immediate Annuity

All of the following statements about equity index annuities are correct EXCEPT

The annuitant receives a fixed amount of return

In a survivorship life policy, when does the insurer pay the death benefit?

Upon the last death

Which of the following is a feature of a Variable Annuity?

Benefit payment amounts are not guaranteed

What is an example of a limited-pay life policy?

Life Paid-Up at age 65

Type of policy that can be changed from one that does not accumulate cash value to the one that does

Convertible Term Policy

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guarantee minimum interest rate

Which of the following is true for both equity indexed annuities and fixed annuities?

They have a guaranteed interest rate

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?

An annuity

What policy's interest rate (from the company's investments and expense factors) affect the amount of cash value?

Interest-sensitive Whole Life

Policy that covers two lives in which the premium is based on an average age; pays a death benefit only at first deatj

Joint Life

Requires the entire premium to be paid in one lump sum at the policy's inception

Single Premium Whole Life

What annuity has interest rates tied to the Standard And Poor's 500 Index?

Equity Indexed Annuity

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower

Which of the following is true regarding the annuity period?

It may last for the lifetime of the annuitant