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Insurance > Annuities > Flashcards

Annuities Flashcards

1
Q

How are annuities classified depending on how many lives they cover?

A

Single life and multiple life annuities.

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2
Q

In an annuity, the accumulated money is converted into a stream of income during which phase?

A

Annuitization period.

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3
Q

Can a business or a corporation be an annuitant?

A

No, an annuitant must always be a natural person.

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4
Q

What are the two types of refund life annuities?

A

Cash refund and installment refund.

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5
Q

How long will a life annuity with a 15-year period certain pay?

A

For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments will last for 15 years.

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6
Q

What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?

A

STRAIGHT LIFE

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7
Q

With a single premium deferred annuities, when will the annuity payments become available?

A

No sooner than 1 year after the annuity purchased.

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8
Q

What is a disadvantage of owning a fixed annuity, as opposed to variable?

A

In times of inflation, the benefit of a fixed annuity will have decreased purchasing power.

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9
Q

Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?

A

The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant’s death.

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10
Q

Who receives income payments from an annuity?

A

Annuitant.

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11
Q

What causes a variable annuity benefit to vary?

A

The annuity’s underlying investments.

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12
Q

What are the two phases of an annuity?

A

Accumulation and annuitization (or pay-in and pay-out).

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13
Q

What are the accumulation units in annuities?

A

Ownership interest in the separen account ( instead of buying shares, annuity holder purchases accumulation units).

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14
Q

What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and ceases at the annuitants death?

A

Pure life.

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15
Q

What type of license(s) is /are required in order to sell variable annuities?

A

A life insurance license and a securities license.

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16
Q

An individual has a contract that will provide him with a certain amount of income for the rest of his life. However, this is not a life insurance policy. What type of contract does this person have?

A

Annuity.

17
Q

What is the main reason for purchasing an annuity?

A

To provide an income that the annuitant cannot outlive.

18
Q

If the annuitant dies before the annuitization period starts, what will the beneficiary receive?

A

Either the amount paid into the annuity or the cash value, whichever is greater.

19
Q

What type of annuity requires an agent to have a securities license?

A

Variable annuity.

20
Q

What type of annuity can be purchased with a single premium?

A

Immediate annuity.

21
Q

How Kobe is income paid under a pure life annuity?

A

Only for the life of the annuitant.

22
Q

In flexible premium payment annuities, the term “flexible” refers to what?

A

Amount of premium.

23
Q

If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity Is that?

A

……

24
Q

Whose life expectancy is taken into consideration in an annuity contract?

A

Annuitant.

25
Q

Who bears the investment risk in a fixed annuity?

A

The insurer.

26
Q

Who posses all the rights in an annuity?

A

Annuity owner.

27
Q

What type of annuity credits it’s interested based upon an index such as S&P 500?

A

Equity indexed annuity.

28
Q

What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?

A

Life income with period certain.

29
Q

What is the difference between a single premium and a flexible premium payment options in a deferred annuity?

A

The number of payments that purchased the annuity.

30
Q

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

A

Beneficiary.

31
Q

If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?

A

Annuitant’s estate.

32
Q

An annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is know as what type of annuity?

A

Flexible premium deferred annuity.

33
Q

If the current interest rate on an annuity is higher than the guaranteed rate, which rate will the annuity owner receive as part of the annuity payment?

A

Current.

34
Q

What are the two classification of annuities according to the time when annuity payments begin?

A

Immediate and deferred.

35
Q

How soon can income begin in an immediate annuity?

A

No later than 1 year from the time of annuity purchase.

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