PHP Ch. 5
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?
Bail-out
What license or licenses are required to sell variable annuities?
Both a life insurance license and a securities license
Which of the following is NOT a term for a period of time during which the annuitant or the beneficiary receives income?
Depreciation period
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?
The insurance company's general account
Which of the following products requires a securities license?
Variable annuity
If a contract holder returns an annuity contract within the free look period, he or she -
Will receive a fund of all funds paid
When an annuity is written, whose life expectancy is taken into account?
Annuitant
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or cash value of the plan, whichever is the greater amount
An annuity owner is funding an annuity,what will supplement her retirement?
Equity Indexed Annuity
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?
Guaranteed surrender value
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT -
It is a life contingency option
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant
Which of the following is true regarding the annuity period?
It may last for the lifetime of the annuitant
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
Which of following is NOT true about a joint and survivor annuity benefit option?
Payments stop after the first death among the annuitants
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint Life
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a -
Joint life annuity
Which of the following best describes a bail-out provision?
It allows the owner to surrender the annuity without a charge
Annuities can be used to fund which of the following?
Retirement plans
Which of the following is TRUE regarding variables annuities?
The annuitant assumes the risk on investment
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment
The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?
The cash value will be paid to the annuitant's estate
If an annuity was defaulted due to nonpayment of premium, what must happen before the policy can be reinstated?
All overdue payments and any debt due to insurer must be paid
Which of the following will NOT be an appropriate use of a deferred annuity?
Creating an estate
An agent selling variable annuities must be registered with
FINRA
Under which installments options does the annuitant select the amount of each payments, and the insurer determines how long they will pay benefits?
Fixed amount
Annually renewable term policies provide a level death benefit for a premium that -
Increases annually
In regards to disclosure requirements for annuity contracts, if the buyer's guide and the disclosure document are available to be printed from the insurer's website -
This will fulfill the disclosure requirements for applications received through the internet
After an annuity contract is delivered, a contract holder has a free-look period of -
10 days
How long is the free look period for annuities if the contract holder is older than 65?
30 days
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?
Installments for a fixed period
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
Which of the following is true regarding a waiver of a surrender charge on a an annuity contract?
The charge may be viewed if the annuitant is confined to a long-term care facility for at least 30 days
All of the following are true of an annuity owner EXCEPT -
The owner must be the party to receive benefits
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive the surrender value of the annuity
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies
The following statements are true regarding installments for a fixed amount EXCEPT -
The payments will stop when the annuitant dies
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into payments
