Insurance Exam: Chapter 5
Which of the following products requires a securities license?
Variable annuity
Which of the following is true regarding a modified guaranteed annuity?
The owner is guaranteed a fixed interest rate for a specific period of time
Fixed annuities provide all of the following EXPECT
Hedge against inflation
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
$50,000
Which of the following is NOT true about a joint and survivor annuity benefit option?
Payments stop after the first death among the annuitants
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Your client's employer does not offer a company-wide annuity contract. What type of annuity contract could your client obtain?
Individual
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It provides a higher monthly benefit than a pure life annuity
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
The equity in an equity index annuity is linked to
An index like Standard & Poor's 500
The term "fixed" in a fixed annuity refers to all of the following EXPECT
Death benefit
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
All of the following statements are true regarding installments for a fixed amount EXPECT
The payments will stop when the annuitant dies
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
What is the advantage or having a qualified annuity?
Favorable tax treatment
The act that sets the standards for advice given by insurance producers regarding annuities is known as the Nebraska
Protection in Annuity Transaction Act
All of the following statements are true regarding installments for a fixed period annuity settlement option EXPECT
It is a life contingency option
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
