5) Annuities
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) PLan (TSA)
Joint Life
A payout arrangement where two or more annuitants receive payments until the first death among the annuitants, and then payments stop.
Income Payments from a deferred annuity begin sometime
After 1 year from the date of purchase
Five Factors to determine Premiums
Age; Gender ; Interest Rate; Amount and payment guarantee ; Loading
Accumulation Period
Also known as the pay-in-period of time in which the owner makes premiums into an annuity
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Guaranteed Minimum Withdrawal Benefit
Annuitant can withdraw a maximum percentage of his/her investment anually.
if a beneficiary is NOT named for annuity benefits, to which entity will the benefit be paid?
Annuities estate
Which of the following products provides income for a specified period of years or life and protects a person against outliving his or her money?
Annuity
Which of the following products will protect an individual from outliving his or her money?
Annuity
Two types of refund life annuities;
Cash refund and installment refund
Annuity
Contract that provides income for a specified period of years, or for life.
Surrender Charge
Help compensate the company loss of the investment value due to an early surrender of a deferred annuity.
Which of the following is true regarding the annuity period?
It may last for the lifetime of the annuitant.
Funds are paid into the annuity.
What happens during the accumulation period?
Funds are paid out to the annuitant
What happens during the annuity period?
Main different between immediate and deferred annuities is
When the income payments begin
Fixed Period Installments
annuitant selects the time period for the benefits, and the insurer determines how much each payment will be, based on the value of the account and future earnings projections.
All of the following are true of an annuity owner Except
he owner must be the party to receive benefits
Pure Life Annuity
provides the highest monthly benefit, but there is no guarantee that the entire principal will be paid out
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
the cash value will be paid to the annuitants estate
Which of the following statements regarding the nature and purpose of life insurance and annuitites is true?
Life insurance is purchased for the risk of dying too soon
Shorter Life Expectancy = Higher Benefit;
Longer Life Expectancy = Lower Benefit
Provide retirement income
Main use of Annuities?
Beneficiary
Person who receives annuity assets if the annuitant dies during the accumulation period
Annuitant
Person who receives benefits or payments from the annuity, whose life expectancy is taken into consideration
Owner
Purchaser of the annuity contract but not necessarily the one who receives the benefits
Individual and group
Qualified Retirement Annuities
Annuities can be used to fund which of the following?
Retirement Plans
An immediate annuity is purchased with a
Single Premium
which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
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
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary