Life XIV Life ANNUITIES

What are accumulation units converted to upon annuitization of a Variable Annuity? A. Variable units B. Nothing C.There is not enough information to calculate D. Annuity Units

Annuity Units

What is an annuity option that returns the difference between an annuity's value and the income payments made to a beneficiary, when an annuitant dies during the distribution period? A. Pre-Annuity Refund B. Variable Refund C. Liquidated Refund D. Cash Refund

Cash Refund

What do accumulation units of Variable Annuities convert into upon annuitization? A. They do not covert B. Premium units C. Annuity units D. Dividends

Annuity units

Producers must obtain information about a consumer in order to make a professional annuity recommendation. Which of the following would not be an acceptable relevant source of information needed by the producer? A. Tax background B. Income C. Beneficiary's age D. Financial Status

Beneficiary's age

Bill has a Variable Annuity with XNY Company. Who bears the investment risks regarding the policy? A. Primary beneficiaries B. Bill C. XNY Company D. The Stockholders

Bill

If an annuitant dies before annuitization occurs, what will the beneficiary receive? A. Cash value of the plan B. Amount paid into the plan C. Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount D. Either the amount paid into the plan or the cash value of the plan whichever is the greater amount.

Either the amount paid into the plan or the cash value of the plan whichever is the greater amount.

What type of annuity has a guaranteed interest rate and is conservatively invested? A. Fixed B. Market C. Variable D. Equity

Fixed

where are Fixed Annuity premium payment invested?

General Account

What kind of annuity option guarantees to pay pay the total amount equal to the purchase price to a living to a living annuitant? A. Pure life Annuity B. Cash Refund Annuity C. Installment Refund Life Annuity D. Life with Guaranteed Minimum Annuity

Installment Refund Life Annuity

The annuity owner may change the annuity date, the settlement option and even the beneficiary, but cannot change the ............... date.

Issue

Which of the following describes the effect of the market value adjustment in a market value adjustment annuity? A. It provides the annuitant to adjust their investment rate B. It transfers part of the investment risk to the policy owner C. There is no effect D. It transfers the investment risk to the contingent beneficiary for 3 years

It transfers part of the investment risk to the policy owner

Tim is an agent with J&F Insurer. He needs to obtain certain information from his client in order to recommend an annuity product. which of the following does not need to be obtained? A. Age B. Income C. Financial status D. Marital status

Marital status

An Individual Straight Life Annuity is correctly associated with which of the following statements? A. Payments are made to an annuitant for life B. An annuitant's life expectancy is not a characteristic of the annuity C. Payments from the annuity are tax free when received D. The annuity is for non-profit organizations

Payments are made to an annuitant for life

Which of the following is not a factor used in determining the suitability of an annuity? A. Income B. Age C. Tax rate D. Residence

Residence

Sonny has an indexed annuity. What is its rate of return linked to in the market index? A. NAIC B. Mutual bonds C. S & P 5000 D. Poors

S & P 5000

Variable annuity premiums are invested in ...................... .................. during the accumulation period.

Separate accounts

what kind of premium is associated with an immediate annuity? A. Modified B. Adjusted C. Variable D. Single

Single

A Pure Life Annuity is also known as a : A. Life with Certain Annuity B. Straight Life Annuity C. Adjustable Life Annuity D. Refund Life Annuity

Straight Life Annuity

Which of the following best describes the interest paid during an annuity's payout time? A. Not taxable B. Is capital gains and taxable C. Tax deductible D. Taxable as ordinary income

Taxable as ordinary income

Who can surrender a deferred annuity? A. The annuity owner B. It depends on the amount of the annuity C. Beneficiary D. No One

The annuity owner

Who bears all of the investment risk in a fixed annuity? A. The insurance company B. The beneficiary C. The owner D. The annuitant

The insurance company

Which of the following does not apply to an annuity owner? A. The owner may surrender the annuity B The owner must be the party to receive benefits C. The owner names the beneficiary D. The owner always pays the premiums

The owner must be the party to receive benefits

Goober's Furniture wants to purchase an annuity. As Goober's agent, you should alert Goober to the fact that an annuity cannot be used as an investment vehicle to defer taxes on company assets. True or False A. True B. False

True

Which type of annuity reflects varying economic and market conditions? A. Fixed B. Variable C. Separate D. General

Variable

Which contract liquidates an estate by recurrent payments? A. Bonds B. Annuity C. Whole Life D. TSA

Annuity

Ben has a deferred annuity. How soon will his payments begin? A. At any time after the purchased it B. Anytime within 12 months of its purchase C. Anytime within 6 months of its purchase D. At least 12 months after it was purchased

At least 12 months after it was purchased

Which type of annuity has a guaranteed interest rate and benefits?

Fixed

Under Fixed Annuity contracts, the party who assumes the investment risk is the: A. Annuitant B. Contractor C. Beneficiary D. Insurer

Insurer

What is taxed on a lump sum Annuity Settlement amount?

Interest

An annuity with a bailout provision allows the annuitant to surrender the annuity without penalty if the .............. .................... goes below a stated value.

Interest Rate

Under a Straight Life Annuity, if an annuitant dies before the principal amount is paid out, the beneficiary will receive which of the following? A. Guaranteed minimum benefit B. Nothing; the payments will cease C. The remainder of the principal D. The amount paid into the annuity

Nothing; the payments will cease

What isn't considered in a single premium annuity? A. Gender B. Premium Amount C. Attained Age D. Number of dependents

Number of dependents

A (n)........................... ...................... has values that grow and fluctuate in relationship to the performance of the stock market.

Variable Annuity

With a single Premium Deferred Annuity (SPDA), when are the benefits paid? A. When an owner retires B. When the owner turns 100 C. After the death of an owner D. After more than one year

After more than one year

What is the advantage of having a qualified group annuity? A. There is no advantage B. An employer receives a tax deduction for their contributions C. Higher dividends D. Receiving a lump-sum settlement tax free

An employer receives a tax deduction for their contributions

A Variable annuity policy owner must be notified of accumulated value in which time? A. Monthly B. Annually C. Twice a year D. Only by request

Annually

What is the person whose life an annuity has been issued called?

Annuitant

Which of the following is a true relationship between an annuity and a life insurance Policy? A. Both provide income for life B. Both use Mortality Table C. Both are insurance products D. Both use a Prime Factorization Table

Both use Mortality Table

What kind of an annuity option will pay a lump sum amount that is the difference between an annuity's value, and its income payments, to a beneficiary upon annuitant's death? A. Variable B. Cash Refund C. Installment for a Fixed Period D. Straight Life

Cash Refund

What are individual certificates under a Group annuity Called? A. Certificates of Participation B. Certificates of Coverage C. Certificates of Authorization D. Certificates of Insurance

Certificates of Participation

Joan is a producer that is considering the suitability of an annuity recommendation for a consumer. Which of the following must she consider? A. Return rate B. Poor's rating C. Financial status D. Interest earned

Financial status

Which of the following is not a feature of a Straight Life annuity? A. No death benefit B. Gender and age are factors of income amount C. The beneficiary will receive a refund if the annuitant dies during the pay-out phase. D. Payments will continue until the annuitant dies

The beneficiary will receive a refund if the annuitant dies during the pay-out phase.

Equity Indexed Annuities: A. Are security instruments B. Seek higher returns than fixed Annuities C. Are more risky than Variable Annuities D. Are invested conservatively

Seek higher returns than fixed Annuities

Which of the following is NOT a term for the period of time during which an annuitant is making payments or investments in their annuity? A. Deferred period B. Annuitization C. Accumulation D. Pay in Period

Annuitization

Mr. Simms has a Variable Annuity. He is required to be notified about his annuity's accumulated value. When must this occur? A. Only upon request B. At least once each year C. Each month D. Bi-annually

At least once each year

A Variable Annuity has a payout that is : A. Contingent upon the profitability of its investment portfolio B. Guaranteed in the contract C. The same from one payment to the next D. Tied to an index like S&P 500

Contingent upon the profitability of its investment portfolio

Which is correct regarding a Variable Annuity? A. Investment are always conservative B. Annuitant bears the risk C. Stockholders bear the risk D. The company bears the risk

Annuitant bears the risk

What feature applies to a Deferred Annuity? A. Income payments begin sometime after a year B. Income payments begin after three years C. Income installments begin the same time as a Straight Life Annuity D. Income installments begin immediately

Income payments begin sometime after a year

What do annuity units represent? A. Shares in an investment account and are invested in the stock market B. Cash value C. Market separate account values D. Guaranteed values

Shares in an investment account and are invested in the stock market

............................ annuities are invested in securities, hopefully maintaining a constant purchasing power, as protection against inflation. A. Separate B. Variable C. Guaranteed D. General

Variable

Who selects the length of the period in an annuity type with Installments for a Fixed Amount?

The Insurer

Ann is very concerned about the surrender of her deferred annuity before its annuitization period. Which of the following will most likely happen? A. Nonforfeiture option will guarantee that Ann will receive a surrender value of her contract B. The funds will be forfeited C. Ann will be penalized 50% of its value D. Ann will only receive 50% of the funds

Nonforfeiture option will guarantee that Ann will receive a surrender value of her contract