pt 6
Ann is beneficiary of an annuity owned by Jim, who is also the annuitant. If Jim annuitizes the contract at retirement and dies shortly afterward, what benefits will Ann receive from the annuity?
Ann's right to any funds will be based on the income payout option Jim selected.
All of the following statements regarding a variable annuity's assumed interest rate (AIR) are correct, EXCEPT:
If the actual return is greater than the AIR, payments will decrease.
What is the purpose of the bailout provision of a deferred annuity contract?
Permit the owner to withdraw funds at any time, without a surrender charge, if the interest rate falls below a specified level.
What is the only restriction on naming an annuitant?
The annuitant must be a natural person.
Which statement about deferred annuity surrender charges is correct?
The surrender charge percentage typically decreases over the surrender charge period.
Kelly owns a deferred annuity. What options does she have for using the funds accumulating in her contract before the annuitization date?
They can be withdrawn, partially or in full, before the contract annuitizes.
All the following statements regarding deferred annuity beneficiaries are correct EXCEPT:
With an annuitant-driven contract, the beneficiary must annuitize the contract immediately if the annuitant dies before annuitization.
Under which annuity settlement options are payments made for as long as it takes to liquidate the annuity principal, at which point payments terminate whether or not the annuitant is still alive?
fixed amount option
Which of the following annuities accepts periodic premiums of any amount (above a specified minimum) and on any frequency desired by the annuity owner?
flexible premium deferred annuity
If a market-value adjusted annuity (MVA) is surrendered before the end of the contract term at a time when current market interest rates are lower than they were when the annuity was issued, the insurer will:
increase the interest rate on the withdrawn funds and charge the normal surrender charge
Which of the following annuity settlement options includes a life contingency?
life income with period certain option
Which of the following settlement options does NOT include a life contingency?
period certain-only option
The death benefit of a fixed deferred annuity equals:
the contract's accumulated value when death occurs
Jenny directed $2,500 of her premium deposit to an aggressive technology stock sub-account. At the time of her original deposit, the value of an accumulation unit in that sub-account was $25. Jenny bought 100 units. Two months later, the value of each of those units dropped to $15. What is Jenny's investment in the technology stock account now?
$1,500
Jenny has purchased a variable annuity. She directs $2,500 of her $5,000 premium deposit into the contract's blue-chip stock sub-account when its net asset value is $10. How many accumulation units has Jenny bought?
250 accumulation units of the sub-account 2,500
Which of the following statements regarding variable annuity annuitization is correct? Annuitization
Annuitization under a variable annuity contract provides income payments that can fluctuate up or down.
All of the following statements regarding the annuity purchase rate (APR) are correct EXCEPT:
At any age, the APR is the same for every annuity settlement option.
When can the owner of a deferred annuity select a settlement option?
any time prior to annuitization
Which of the following correctly describes an indexed annuity contract owner's option(s) at the end of the contract's term?
surrender, renew, or annuitize the contract
Sue, an annuity owner, names her 15-year-old son and 10-year-old daughter as joint annuitants of her contract. Upon whose life (or lives) are income payments determined?
the joint life expectancy of Sue's son and daughter