Annuities

Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5 years, Cindy dies. How many remaining payments will the insurer make to her beneficiary?

60 payments

An annuitant would like to determine the amount of an annuity distribution that is exempt from taxation. What is used to calculate this?

Exclusion ratio

What kind of annuity pays income to two annuitants until their deaths?

Joint and survivor annuity

Which of the following is NOT a feature of equity-indexed annuities?

Offers a maximum interest rate that increases annually

What distinguishes a deferred annuity from an immediate annuity?

The time at which benefit payments start

What is a common reason people purchase an annuity?

To protect against the risk of outliving their financial resources

An annuitant would like to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description?

Variable annuity

The systematic liquidation of a sum of money is provided by a(n):

annuity

Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life with "ten years certain". Her annuity will make payments

for a minimum of 120 months and a maximum of the remainder of her life

An annuity which is backed by a life insurer's separate account is called a(n):

variable annuity