Northwestern Mutual: Annuities
What type of license is required to sell variable annuities?
a life insurance license and a securities license
If there is no name beneficiary for the annuity benefits to which entity will the benefits be paid?
Annuitant's estate
An individual has a contract that will provide him a certain amount of income for the rest of his life. This is not, however, a life insurance policy. What type of contract does this person have?
Annuity
Who possesses all the rights in an annuity?
Annuity owner
What are the two phases of an annuity?
Accumulation and annuitization (or pay in/pay out)
In a flexible premium payment annuities, the term flexible refers to what?
Amount of premium
What are the two types of refund life annuities?
Cash refund and installment refund
If the current interest rate on an annuity is higher than the guaranteed rate, which rate will the annuity owner receive as part of the annuity payment
Current
What type of annuity credits its interest based upon an index such as Standard and Poors 500
Equity indexed annuity
An annuity purchased with multiple payments that beings income payments after one year from the moment of purchase is known as what type of annuity?
Flexible premium deferred annuity
How long will a life annuity with 15 year period certain pay?
For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments will last for 15 years
what are the two classifications of annuities according to the time when the annuity payments being?
Immediate and deferred
What type of annuity can be purchased with a single premium?
Immediate annuity
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?
Life income with period certain
Can a business or a corporation be an annuitant?
No an annuitant must always be a natural person
How soon can income payment begin in an immediate annuity?
No later than 1 year from the time of annuity purchase
With a single premium deferred annuity, when will the annuity payments become available?
No sooner than 1 year after the annuity purchase
How long is the income paid under a pure life annuity?
Only for the life of the annuitant
What are accumulations units in annuities?
Ownership interest in the seperate account
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity
annuitant recieves payments from the annuity during the annuitization period, the beneficiary recieves benefits after the annuitant's death
Who receives income payments from an annuity?
Annuitant
Whose life expectancy is taken into consideration in an annuity contract?
Annuitant
In an annuity, the accumulated money is converted into a stream of income during which phase
Annuitization period
What is a disadvantage of owning a fixed annuity as opposed to a variable annuity?
In times of inflation, the benefit of a fixed annuity will have decreased the purchasing power
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
Join life annuity
What annuity settelment option provides income payments to the annuitant for the duration of his or her life, and ceases at the annuitant's death?
Pure Life
How are annuities classified depending on how many lives they cover?
Single life and multiple life annuities
What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?
Straight life
Who bears the investment risk in a fixed annuity?
The insurer
What type of annuity requires an agent to have a securities license?
Variable annuity
If the annuitant dies during the accumulation period who will receive the annuity benefits?
beneficiary
If the annuitant dies before the annuitization period starts, what will the beneficiary recieve?
either the amount paid into the annuity or the cash value, whichever is greater
What causes a variable annuity benefit to vary?
the annuity's underlying investments
What is the difference between a single premium and a flexible premium payment options in a deferred annuity?
the number of payments that purchase the annuity
What is the main reason for purchasing an annuity?
to provide income that the annuitant cannot outlive
