EXAMFX- Annuities

IRS

(Internal Revenue Service) Governmental agency responsible for collecting federal taxes, issuing regulations, and enforcing tax laws

qualified plan

A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

Variable Annuity

Annuity that has a varying rate of return based on the mutual funds in which one has invested

Life contingency

Dependent upon whether or not the insured is alive

fixed period installments

The 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. This option pays for a specified amount of time only, whether or not the annuitant is living.

Flexible Premium Deferred Annuity

The annuity purchased with multiple payments, whose benefit is paid more than one year after the purchase is known as which type of annuity?

Life with Period Certain

When policy owner wants to get income for life but also wants to guarentee that a survivor gets a benefit if he dies for a certain period of time; made in 5,10,15 and 20 years option

annuity

a contract that provides the investor with a series of regular payments, usually after retirement

suitability

a requirement to determine if an insurance product is appropriate for a customer

liquidation of an estate

converting a person's net worth into a cash flow

Life with Guaranteed Minimum

established and designed to guarantee the distribution of the annuity's funds, whether it is paid to the annuitant, or to a designated beneficiary upon the annuitant's death. Four of the five annuity payout options include some type of guaranteed return of the annuity's benefit payments.

Indexed Annuities

fixed annuities that invest on a relatively aggressive basis to aim for higher returns

natural person

human being

short-term annuities

limit the amounts paid to a certain fixed period or until a certain fixed amount is liquidated

Joint and Survivor Annuity

pays benefits based on the lives of two or more annuitants. The annuity income is paid until the last annuitant dies

single premium deferred annuity

purchased with a lump sum, but payment of benefits is delayed until a later date selected by the annuitant

Paid-Up Additions

the dividend is used to purchase a small amount of paid-up whole life insurance

Underlying Investment

the payments that the annuitant makes into the variable annuity are invested in the insurer's separate account, not their general account

deferred

withheld or postponed until a specified time or event in the future