Chp. 7 Annuities
N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities?
Flexible Installment Deferred
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
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
Single Premium
P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? A.) A straight life deferred annuity B.) A straight life annuity C.) An immediate annuity D.) A deferred annuity
An immediate annuity
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? A.) Immediate B.) Retroactive C.) Deferred D.) Universal
C.) Deferred
Which of these statements concerning an Individual Straight Life annuity is accurate? A.) Life expectancy of the annuitant is not a factor B.) The payments are received tax-free C.) Only available to employees of nonprofit charitable, educational, and religious organizations D.) Payments are made to an annuitant for life
D.) Payments are made to an annuitant for life
G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer:
Doesn't have to make any further payments
The type of annuity that can be purchased with one monetary deposit is called a(n):
Immediate annuity
How does an indexed annuity differ from a fixed annuity?
Indexed annuity owners receive credited interest tied to the fluctuations of the linked index
An immediate annuity consists of a:
Single Premium