Annuities

Joint Life settlement Option is ?

2 or more annuitants receive payments until first death, then payments cease

What is an Annuity Contract?

An annuity is a contract that provides income for a specified period of years, or for life.

What is an immediate annuity ?

An immediate annuity is one that is purchased with a single, lumpsum payment and provides income payments that start within one year from the date of purchase

When doe an Annuity contract provide for a waiver of surrender charges?

Annuity contracts provide for a waiver of surrender charges if the annuitant is confined to a Longterm Care facility for at least 30 days.

What are the annuity investment options

Fixed annuity ,Variable Annuity,Indexed (or equity indexed)

Regarding the underlying Investment, Fixed Annuities have a___________ and Variable Annuities have a _____?

General account, Separate account

What are the Annuity Settlement Options?

Life Only, Refund Life Annuity , Life with Period Certain joint life joint and survivor lump sum annuities certain

What is the accumulation period?

The accumulation period, also known as the payin period, is the period of time over which the owner makes payments (premiums) into an annuity.

Does the annuitant need to be a natural person?

Yes

Who are Annuities marketed by?

Annuities are marketed by life insurance companies. Licensed life insurance agents are authorized to sell some types of annuities

What are fixed annuities?

In fixed annuities, the insurer bears the investment risk. Future interest rates actually paid by an insurer are based upon the performance of the insurance company. However, the rate may not drop below a policy's guaranteed minimum (

Who can own an Annuity

A corporation, trust or other legal entity may own an annuity.

What is a deferred annuity ?

A deferred annuity is an annuity in which the income payments begin sometime after one year from the date of purchase.

Do annuities pay a face amount upon death?

Annuities do not pay a face amount upon the death of the annuitant. In fact, they do just the opposite. In most cases, the payments stop upon the death of the annuitant.

Regarding Expenses, Fixed Annuities are Variable Annuities are both _____?

Guaranteed

Regarding the type of licenses needed, Fixed Annuities require a ___________ license and Variable Annuities require a _____ license?

Life insurance Life insurance PLUS securities

What happens if an annuitant dies during the accumulation period?

if an annuitant dies during the accumulation period, the insurer is obligated to return to the beneficiary either the cash value or the total premiums paid, whichever is greater. If a beneficiary is not named, the benefit will be paid to the annuitant's estate

What is the life only settlement option?

insured cannot outlive income. Any monies not paid out are Options retained by company at insured's death. Pays highest monthly amount

Annuities Certain Settlement Option is ?

payment guaranteed for fixed period or until certain fixed amount paid. NO LIFE option.

What does an annuity protect the insured against ?

An annuity protects a person against outliving his or her own money

What are the premium payment options?

There are 2 options: a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time. Periodic payment annuities can be either level in which the annuitant/owner pays a fixed installment, or flexible premium, in which the amount and frequency of each installment varies

What is the annuity period?

The annuity period, also known as the annuitization period, liquidation period, or payout period, is the time during which the sum that has been accumulated during the accumulation period is converted into a stream of income payments to the annuitant.

Who is permitted to be an owner of an Annuity ?

The owner of an annuity may be a corporation, trust, or other legal entity.

Who is the annuitant?

The person who receives benefits or payments from the annuity, whose life expectancy is taken into consideration, and for whom the annuity is written.

What is a variable annuity?

A variable annuity serves as a hedge against inflation, and is variable from the standpoint that the annuitant may receive different rates of return on the funds that are paid into the annuity.

At surrender what doe the owner receive?

At surrender, the owner gets the premium, plus interest (the value of the annuity), minus the surrender charge.

Regarding interest rates, Fixed Annuities are___________ and Variable Annuities are_____?

Guaranteed by insurer, Not guaranteed

Refund Life Annuity Settlement Option is ?

Guaranteed lifetime income. If annuitant dies, balance is "refunded" to beneficiary. Installment option gives beneficiary payments until purchase amount is paid out. Cash refund gives refund of balance of original annuity purchase amount minus payments made to annuitant.

Regarding Income payments, Fixed Annuities are___________ and Variable Annuities are_____?

Guaranteed,Not guaranteed

Joint and Survivor Settlement Option is ?

Income for 2 or more that cannot be outlived. Often used with period certain. When one annuitant dies, the other receives either 1/2 or 2/3 of the original payment amount.

What are indexed (or equity indexed) annuities?

Indexed (or equity indexed) annuities are fixed annuities that invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity, the indexed annuity has a guaranteed minimum interest rate.

Life with Period Certain Option Settlement Option is ?

Specific monthly payment for life and a specific period of time. If annuitant dies before payment period is up, payment goes to beneficiary.

What is the bail out provision?

in the event that interest rates drop a specified amount within a specified time frame, to surrender the contract without charge.

Lump Sum Settlement Option is ?

paid at annuitization; all interest accumulated is taxable. Additional 10% penalty imposed prior to annuitant's reaching 59 1/2.

Are Annuities the same as life insurance?

Annuities are not life insurance, but rather a vehicle for the accumulation of money and the liquidation of an estate.

Regarding the underlying Investment, Fixed Annuities are by nature___________ and Variable Annuities are by nature_____?

(safe, conservative) (equities, no guarantee)

Who is the beneficiary in an annuity contract?

The person who receives annuity assets (either the amount paid into the annuity or the cash value, whichever is greater) if the annuitant dies during the accumulation period, or to whom the balance of annuity benefits is paid out.

How do you define the owner of an annuity contract?

The purchaser of the annuity contract, but not necessarily the one who receives the benefits. The owner of the annuity has all of the rights,

What is the purpose of a surrender charges

The purpose of the surrender charge is to help compensate the company for loss of the investment value due to an early surrender of a deferred annuity.