annuities
When does an immediate annuity begin making payments?
After the first premium has been paid
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?
Guaranteed lifetime withdrawal benefit
Which of the following is NOT a feature of equity-indexed annuities?
Offers a maximum interest rate that increases annually
How do interest earnings accumulate in a deferred annuity?
On a tax-deferred basis
Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?
Period certain
Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?
Premiums paid plus interest earned is returned to the beneficiary
What is the primary reason for buying an annuity?
Provide future economic security
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?
Temporary annuity certain
Which of these statements regarding the annuitant is CORRECT?
The annuitant's life expectancy determines the annuity payments
Who assumes the investment risk with a fixed annuity contract?
The insurer
What distinguishes a deferred annuity from an immediate annuity?
The time at which benefit payments start
The systematic liquidation of a sum of money is provided by a(n):
annuity
Under a non-qualified annuity, interest is taxed after the
exclusion ratio has been calculated
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
An annuity which is backed by a life insurer's separate account is called a(n):
variable annuity
The taxable portion of each annuity payment is calculated using which method?
Exclusion Ratio