Chapter 3 Multiple Choice

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

Accumulation period

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

Benefits stop at the annuitant's death

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

Fixed Annuity

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

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

Straight Life

Who bears the investment risk in a fixed annuity?

The insurance company

An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 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

What does an annuity protect the contract owner against?

Living longer than expected

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

Annuitant

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

Single Premium Immediate Annuity

Which type of annuity settlements stops when the annuitant dies?

Life Annuity

Which of the following statements is true about annuities?

They can provide a lifetime income

Annuities can be used for all of the following EXCEPT

To create an estate