XCEL Chapter 9

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in? A. Payout period B. Accumulation period C. Deferred period D. Growth period

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called? variable payout fixed accumulation interest guaranteed annuity certain

An annuity is primarily used to provide? A. retirement income B. disability income C. long-term care benefits D. death benefits

What is the primary reason for buying an annuity? A. Provide tax-free income B. Provide a risky, yet high return investment C. Provide an instant estate D. Provide future economic security

The taxable portion of each annuity payment is calculated using which method? A. Exclusion Ratio B. Taxable Ratio C. Cost Basis D. Tax Basis

If the annuitant dies before the annuity start date? A. the benefits will be given tax-free only to a stated beneficiary B. nothing is given to the beneficiary C. the premiums paid will be given to the beneficiary D. the premiums paid plus interest earned will be given to the beneficiary

Which of these statements regarding the annuitant is CORRECT? A. The contract can only be assigned by the annuitant B. The annuitant is the only individual who can surrender the contract C. The annuitant must also be the beneficiary D. The annuitant's life expectancy determines the annuity payments

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? A. Joint life with period certain B. Life annuity with survivorship C. Survivorship annuity D. Temporary annuity certain

What happens to interest earned if the annuitant dies before the payout start date? A. It is taxable B. It is taxable only if no beneficiary is named C. It is not taxable D. It is only taxable if contract has been in force under one year

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? A. Principal returned is taxable B. Benefits are still payable tax-free to the beneficiary C. Company retains entire cash value D. Premiums paid plus interest earned is returned to the beneficiary

Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? A. Life annuity certain B. Secure life annuity C. Irrevocable survivor annuity D. Guaranteed life annuity

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments? A. Period certain B. Straight life C. Installment refund D. Amount certain

When does an immediate annuity begin making payments? A. After multiple premiums have been paid B. After the first premium has been paid C. After policy has been active for one year D. After the incontestable period

What will the beneficiary receive if an annuitant dies during the accumulation period? A. The greater of the accumulated cash value or the total premium paid B. The lesser of the accumulated cash value or the total premium paid C. The interest earned on the accumulated cash value D. Nothing

Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's? A. surrender charge B. death benefit C. cash refund D. income period