14.1f

Question 1

A ______ premium structure allows an annuity contract owner to vary the annuity’s premium deposit amounts at his or her discretion to better follow his or her budget, although a minimum and maximum premium payment level are enforced by the insurer.

Answer 1

flexible

Question 2

Designed as a means of spreading out a lump-sum of money over a specified period of time, a ______ begins to distribute funds immediately after the first payment period (depending on payment frequency: monthly, quarterly, semi-annual, or annual), and is used when a single, lump-sum premium is deposited by the contract owner with the intent of distributing it over a specified period of time to the annuitant (again, the annuity owner and the annuitant can be the same person or two separate people).

Answer 2

Immediate Annuity

Question 3

A ______ delays payout to allow interest to compound over a period of time. Again, an annuity is not taxed during the accumulation period to allow interest to build a quicker rate, thus providing a larger investment return for the annuitant. A deferred annuity can be paid with a single premium, known as a ______, or through multiple premium deposits.

Answer 3

Deferred Annuity

Single Premium Deferred Annuity (SPDA)

Question 4

Some insurers provide additional flexibility by offering a multiple premium, deferred annuity that allows the contract owner to control the premium deposit amounts and frequency within certain limits stated in the contract, known as a ______.

Answer 4

Flexible Premium Deferred Annuity (FPDA)