Annuities

Question 1

one $25,000 premium at the start and no payments for the rest of the policy life.

you can adjust the coverage period, face value and premium payments.

Answer 1

Single Premium and Flexible Premium

Question 2

when an individual pays a single premium, say $200,000, to an insurance company and receives monthly payments, say $5,000, for a fixed time period afterward

a retirement fund where the investor is not yet ready to retire.

Answer 2

Immediate and Deferred

Question 3

An annuity where your money, less any applicable charges, earns interest at rates set by the insurance company or in a way specified in the annuity contract.

An annuity where the insurance company invests your money, less any applicable charges, into a separate account based upon the risk you want to take. The money can be invested in stocks, bonds or other investments. You may direct allocations of your money into separate accounts. If the fund does not do well, you may lose some or all of your investment.

Answer 3

Fixed and Variable

Question 4

if the market went up 8% and the annuity’s participation rate was 80%, a 6.4% return (80% of the gain) would be credited.

Answer 4

Indexed

Question 5

an annuity guarantees $1,000 of monthly income for the lifetime of the annuity holder from age 65 onwards. In order to fulfill that future payout, the annuity holder must contribute $100 a month until age 60.
regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments.

Answer 5

Accumulations and Annuity Periods

Question 6

if you received a $250,000 life insurance payout, you could choose to receive $25,000 a year for 10 years.

Answer 6

Payout Options