Chapter 8 quiz
A husband and wife are receiving annuity payments. When the husband dies, the wife still received annuity payments for life. What kind of annuity is this?
Joint an survivor life annuity.
Terry owns a 20 year life annuity certain and dies before the period of 20 years has elapsed. What happens to any monies left?
Paid to the beneficiary for the rest of the certain period.
John is an annuitant who has surrendered his annuity at age 55. What will he pay?
Tax on the interest earned.
An individual who purchases a life annuity is given protection against:
The risk of living longer than expected.
Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments?
3 months after the annuity is bought.
Kim has purchased a straight life annuity. What will this type of annuity provide her with?
A periodic income to the annuitant for life.
Which of the following is NOT included in an annuity contract?
Accidental death and dismemberment rider.
T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner.
Kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. If she were to die, her beneficiary would continue receiving annuity payments until this amount has been reached. What type of annuity is this?
Refund life annuity.
The monthly benefit of an annuity certain is determined by:
The annuitants payout period selection.