ExamFX Annuities

An annuitant buys a flexible premium deferred life annuity with a 20 year period certain. What would the Benny receive if the annuitant died 5 years after beginning the annuity phase?

15 years of payment

Describe a deferred annuity " how it may be purchased"

A deferred annuity may be purchased with either a single lump sum or periodic payments , but they do not begin the income payments until sometime after 1 year from the date of purchase

What is the annuity period also referred to as ?

Annuitization period, liquidation period, or pay-out period. " time when money is distributed to the annuitant"

What is not true about an annuity certain?

Benefits stop @ the annuitants death

Fixed annuities may provide for what? List 3 things

Future income payments Minimum guaranteed rate of interest Equal monthly payments for life

What's a pure life annuity?

It's an annuity that provides payments to an annuitant for the rest of the annuitants life & ceases at the annuitants death

An annuity would normally be purchased to do what?

Secure income for retirement! "The main purpose is to liquidate an estate and provide income for retirement"

Describe life income with period certain on a life annuity

This form of life annuity pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum # of years "If the annuitant dies before the period certain, the payments continue to the Benny or the estate of the annuitant for the remainder of the period certain

The annuity period is best defined as the time during which the annuitant what?

Time during which the annuitant receives payments