QUIZ- Annuities

the annuity that represents the largest possible monthly payment to an individual annuitant is a(n):

straight life annuity

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

variable

Which type of contract liquidates an estate through recurrent payments?

annuity

what is the basic function of an annuity?

The systematic liquidation of accumulated funds

which of the following is NOT included in an annuity contract?

AD&D rider

all of the following statements regarding a tax sheltered annuity (TSA) are true EXCEPT

Income derived from the TSA is received income tax-free

The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?

flexible installment deferred

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

immediate annuity

Variable annuities may invest premiums in each of the following, EXCEPT:

insurers corporate business account

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

single premium immediate joint with survivor annuity

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

income that cannot be outlived by the owner

How does an indexed annuity differ from a fixed annuity?

indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)

installment refund annuity

a variable annuity has which of the following characteristics?

underlying equity investments