Quiz: Annuity Settlement Options

Which of the following annuity settlement options best suits two spouses who want to make sure payments will continue for as long as either is alive, no matter which of them dies first? A. life income with refund guarantee option B. joint and survivor option C. joint life income option D. straight life income option

B. joint and survivor option Under a joint and survivor option, an income is paid until the second of the two annuitants dies. When the second annuitant dies, no further payments are made to anyone. Joint life income options are common for married couples who want to assure a continued income stream for both lives.

Which of the following statements accurately describes the difference between a joint and survivor (J&S) annuity settlement option and a joint life settlement option? A. The J&S option continues payments until the second annuitant dies, while the joint life option terminates payments upon the first annuitant's death. B. There is no difference between the two. C. The J&S option can only be used with family members, while the joint life option can be used with any two people. D. The J&S option terminates payments upon the first annuitant's death, while the joint life option continues payments until the second annuitant dies.

A. The J&S option continues payments until the second annuitant dies, while the joint life option terminates payments upon the first annuitant's death. The J&S option continues payments until the second (surviving) annuitant dies, while the joint life option terminates payments upon the first annuitant's death.

Annuity income payments are most commonly paid on what schedule? A. annually B. quarterly C. monthly D. in a lump sum

C. monthly Generally, these payments are made monthly, but the owner may be able to request they be paid annually.

Under which settlement option is an income paid until the second of two annuitants dies, at which point no further payments are made to anyone? A. joint life option B. life income with period certain option C. joint and survivor with period certain option D. joint and survivor option

D. joint and survivor option Under a joint and survivor life income option, an income is paid until the second of two annuitants dies. When the second annuitant dies, no further payments are made to anyone.