14 Flashcards
Period when accumulated funds converted into income payments
Annuity period
It is true regarding accumulation period that
It is period during which payments grow tax deferred
The owner of annuity must be the party to receive benefits
False owner purchases and has rights but doesnt have to rec benefits
Pres starting annuity decides corporation will be annuitant. Annuitant
Must be a natural person
Not true of acc period of annuity
Would not occur in deferred annuity
Whose life expectancy taken into account w annuity
Annuitant
During accumulation period funds are paid
Into annuity
During annuity period
Funds are paid out to the annuitant
Annuity income is based upon the following
Amount of premium paid or cash value accumulated, frequency of payment, interest rate, annuitant’s age and gender
If life expectancy longer
Smaller income installments
65 yr old male has higher annuity income payments than
45 year old male or 65 year old female as women live longer statistically
Shorter life expectancy equals
Higher benefit
Longer life exp equals
Lower benefit
Annuities are purchased to provide supplement
Retirement income
Annuities are purchased to fund or help
College education or any situation requiring steady stream of income in future