Annuities

Guaranteed lifetime withdrawal benefit

An annuitant is guaranteed to NOT outlive their benefits with a(n)

annuity certain

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called

Exclusion Ratio

The taxable portion of each annuity payment is calculated using which method?

Policyowner

During the accumulation period, who can surrender an annuity?

Hedge against inflation

Fixed annuities provide each of the following EXCEPT

Aunnity

Fixed period settlement options are considered to be a form of a(n)

Gains are tax exempt at distribution

How are annuities given favorable tax treatment?

Temporary annuity certain

Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity?

Guaranteed lifetime withdrawal benefit

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

income period

Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's

life income

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

life annuity

Which type of annuity stops all payments upon the death of the annuitant?

Equity-indexed annuity

Which of the following is an annuity that is linked to a market-related index?

Annuities are intended to create an estate

Which of these is NOT considered to be a purpose of an annuity?

refund annuity

An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?

1 month

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?

A minimum of 12 months after date of purchase

How soon can the benefit payments begin with a deferred annuity?

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?

exclusion ratio has been calculated

Under a non-qualified annuity, interest is taxed after the

it is taxible

What happens to interest earned if the annuitant dies before the payout start date?

After the first premium has been paid

When does an immediate annuity begin making payments?

period certain

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?

life only

Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?