Annuities

Which of the following can surrender a deferred annuity contract ?

Only the annuity owner

Equity indexes annuities

Seek higher returns

In an annuity the accumulated money is converted into a stream of income during which time period

Annuitization period

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true ?

The annuitant must be a natural person.

Which of the following best describes what the annuity period is ?

The period of time during which accumulated money is converted into income payments

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity indexed annuity

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

Which of the following is true regarding the accumulation period of an annuity

It is a period during which the payments into the annuity grow tax deferred.

Which two terms are associated directly with the way an annuity is funded ?

Single payment or periodic payments

In a fixed annuity which of the following is true regarding the guaranteed interest rate on the investment?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate.

Which of the following will NOT be an appropriate use of a deferred annuity

creating an estate Deferred annuities grow tax deferred, unlike life insurance annuities liquidates estates

What determines the penalty for surrendering a market value adjusted annuity prematurely?

The current interest rate at time of surrender

If a beneficiary is not named for annuity benefits to which entity will the benefit be paid

The annuitants estate

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

The surrender charge is a percentage of the cash value and decreases over time.

All of the following statements about equity index annuities are correct except

the annuitant receives a fixed amount of return

Which of the following is not true regarding the accumulation period of an annuity ?

It would not occur in a deferred annuity.

Which of the following is true regarding a market value adjusted annuity

The owner is guaranteed a fixed interest rate for a specific period of time

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity

According to the nonforfeiture law if the owner decides to surrender a deferred annuity prior to annuitization the owner is entitled to which of the following

Guaranteed surrender value

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is true ?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?

Insurer's guaranteed minimum rate of interest

Annuities can be used to fund which of the following

Retirement plans