When does an immediate annuity begin making payments?
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Straight life
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Which of these will have the highest monthly payout upon annuitization?
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Exclusion Ratio
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The taxable portion of each annuity payment is calculated using which method?
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Refund annuity
(An annuity that returns the difference between the annuity value and the income payments made to a beneficiary when the annuitant dies during the distribution period is a refund annuity.)
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An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity ( a fixed sum of money paid to someone each year, typically for the rest of their life.) value and the income payments already made?
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Annuitization phase
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Which of the following is considered to be the period when the accumulated value in an annuity is paid out?
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Life income
(The settlement option that pays a specified amount to an annuitant, but pays no residual value to a beneficiary is known as life income.)
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Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
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Life only
(The life only annuity payout option has no additional payouts regardless of when the annuitant dies.)
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Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?
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A minimum of 12 months after date of purchase
(A deferred annuity is an annuity contract in which periodic income payments are not scheduled to begin for at least 12 months.)
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How soon can the benefit payments begin with a deferred annuity?
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retirement income
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An annuity is primarily used to provide
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Equity-indexed annuity
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Which of the following is an annuity that is linked to a market-related index?
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S & P 500
(An indexed annuity rate of return is linked to a market index, like the S & P 500.)
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Which market index is normally associated with an indexed annuity's rate of return?
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the premiums paid plus interest earned will be given to the beneficiary
( If the annuitant dies before the annuity start date, the beneficiary receives the premiums paid plus interest earned.)
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If the annuitant dies before the annuity start date,
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During periods of inflation, annuitants will experience a decrease in purchasing power of their payments
( The disadvantage of fixed annuities is annuitants could experience a decrease in the purchasing power of their payments over a period of years due to inflation.)
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Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?
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1 month
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An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?
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annuity
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Fixed period settlement options are considered to be a form of a(n)
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Flexible premium deferred annuity
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Which of these annuities require premium payments that vary from year to year?
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On a tax-deferred basis
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How do interest earnings accumulate in a deferred annuity?
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Life annuity certain
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Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them?
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All premiums paid, plus interest, minus any withdrawals and surrender charges
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What is the nonforfeiture value of an annuity before annuitization?
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The annuitant's life expectancy determines the annuity payments
(. Annuity payments are based on the annuitant's life expectancy.)
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Which of these statements regarding the annuitant is CORRECT?
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Policyowner
(The policyowner is the only one who can surrender an annuity during the accumulation period.)
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During the accumulation period, who can surrender an annuity?
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