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Life Insurance > Annuities > Flashcards

Annuities Flashcards

1
Q

Which annuity payout option allows the policy owner to choose predetermined number of benefit payments? Period Certain. Straight life installment refund. Amount certain.

A

Period Certain.

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2
Q

Which of these annuities require premium payments to vary from year to year? Flexible, premium immediate annuity flexible premium deferred annuity, premium deferred annuity fix premium immediate annuity.

A

Flexible, premium deferred annuity

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3
Q

An annuity is primarily used to provide

A

Retirement income

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4
Q

If the annuitant dies before the annuities start date

A

The premiums paid + interest earned will be given to the beneficiary

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5
Q

What would the beneficiary receive even an annuitant dies during the accumulation period?

A

The insurer is obligated to return all a portion of the annuities value of the contract owner dies. The value will be equal to the amount of any contributions minus withdrawal or other expenses plus interest policy. Owner is required to name a beneficiary and title to proceed if they die during accumulation.

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6
Q

What will it beneficiary received via New intent dies during the accumulation period?

A

The greater of the accumulated cash value or the total premium paid 

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7
Q

Fixed annuities, provide each of the following except… guaranteed interest, retirement, funds, hedge against inflation and tax advantage little little bit

A

Fix annuities do not provide a hedge against inflation

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8
Q

Which market index is normally associated within an index annuity rate of return NAIC, SEC, S & P 500, A & P 300

A

S&P 500; an indexed annuity rate of return is linked to a mark index like the S&P 500

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9
Q

How soon can the benefit payment begin with the deferred annuity? Anytime after date of purchase anytime within the 12 months after DOP a minimum of six months after DOP a minimum of 12 months after DOP.

A

A minimum of 12 months after date of purchase again, bro

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10
Q

Immediate annuities

A

Purchased with a single lump sum payment can start providing income payments within the first year starting 30 days from purchase date provide liquidation of a principal

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11
Q

Immediate annuity / single premium immediate annuity SPIA

A

Use the structure payment of liability insurance settlements lottery winnings or other large sons

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12
Q

Deferred annuities

A

Flexible, premium deferred annuity FPDA / single premium preferred annuity SPDA / fixed deferred annuity

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13
Q

Deferred annuities

A

Will start providing income payments after the first year

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14
Q

Annuities deferred

A

can be purchased with a single lump sum payment SPDA single premium deferred annuity

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15
Q

Deferred annuity

A

With monthly payments, flexible premium, and deferred annuity FPDA

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16
Q

Deferred annuity

A

Fixed deferred annuity pays out a fixed amount for life starting at a future date; interest credited to the cash values of annuities is deferred until distribution

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17
Q

Deferred annuity cancellation

A

During the early contract years, insure can assess a back and load surrender charge

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18
Q

Bail out

A

Single premium deferred annuity. Contracts wave surrender charges, if interest rate falls below a stated level.

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19
Q

Terminated deferred annuity contract

A

To obtain surrender value, the insurer must first obtain authorization from owner

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20
Q

Terminated deferred annuity contract

A

To obtain surrender value, the insurer must first obtain authorization from owner

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21
Q

Accumulation value of a deferred annuity

A

Equal to the sum of premium paid plus interest earned minus expenses and withdrawals

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22
Q

Which is the primary reason for buying an annuity? Tax-free income, risky, yet high return investment, instant estate, future economic security.

A

Future economic security

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23
Q

Which type of annuity guarantees a stated number of income payments in regardless of the annuitant being alive? Life, annuity, certain, secure, life, annuity, irrevocable, survivor Toyota annuity, guaranteed life annuity.

A

Life annuity certain 

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24
Q

Which annuity provides guaranteed accumulation or payout? Variable payout, fix accumulation, interest, guaranteed, annuity certain.

A

Annuity certain

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25
Q

During the accumulation. Who can surrender an annuity? Payor, annuitant, beneficiary, policy owner

A

Policy owner

26
Q

An annuity currently experiencing tax deferred growth is in which phase? Payout, Accumulation, deferred growth.

A

Accumulation

27
Q

Which annuity payout option allows the policy owner to choose a predetermined number of benefit payments?

A

Period Certain.

28
Q

Period Certain.

A

An annuity where the policy owner chooses a predetermined number of benefit payments

29
Q

Which is not considered to be a purpose of an annuity? To create an estate, to liquidate an estate, for tax free growth of principle, to distribute accumulated principle.

A

Annuities are not intended to create an estate

30
Q

What is the primary use of an annuity? Retirement, income, disability, income, long-term care, benefits, death, benefits.

A

Retirement income

31
Q

What is the primary use of an annuity? Retirement, income, disability, income, long-term care, benefits, death, benefits.

A

Retirement income

32
Q

Refund annuity

A

If an annuitant dies during the distribution. The return annuity would give the beneficiary the difference between the annuity value and the income payments made.

33
Q

If an annuity dies before the annuities start date…. benefits will be given tax free only to a state beneficiary, nothing is given to the beneficiary, Premiums paid will be given to the beneficiary, premiums paid plus interest earned will be given to the beneficiary

A

Premium paid plus interest earned will be given to the beneficiary

34
Q

Which annuity requires premium payments that vary from year to year?

A

Flexible, premium deferred annuity

35
Q

Which annuity requires premium payments that vary from year to year?

A

Flexible, premium deferred annuity

36
Q

Fixed period settlement options are considered

A

An annuity

37
Q

Annuitization phase

A

The period when the accumulated value in an annuity is paid out

38
Q

Life income

A

Settlement option that pays a stated amount to an annuity, but provides no residual value to a beneficiary or anyone else

39
Q

Life income

A

Also known as straight life income payout option

40
Q

Straight life, income payout option

A

Offers protection against exhaustion of savings due to longevity

41
Q

Which of these statements regarding the annuitant is correct? The contract can only be assigned by an annuitant. Annuitant is the only individual who can surrender the contract. The annuitant must also be the beneficiary. The annuitants life expectancy determines the annuity payments.

A

The annuitants life expectancy determines the annuity payments. Annuity payments are based on the annuities life expectancy.

42
Q

Fixed immediate annuity payments

A

Are dependent upon principal, interest in contract’s income period

43
Q

Temporary annuity certain

A

Guarantees payments will be made for a specific number of years if the annuity dies before receiving all payments the beneficiary assigned will receive the payments for the remaining number of years

44
Q

Who assumes the investment risk with a fixed annuity contract?

A

The insurer

45
Q

Nonqualified annuities are taxes after

A

Exclusion ratio has been calculated

46
Q

How are annuities given favorable tax treatment?

A

Gains or tax at distribution

47
Q

Exclusion ratio

A

Formula used to determine the annual annuity income exempt from federal income taxes

48
Q

Exclusion ratio

A

Formula used to determine the annual annuity income exempt from federal income taxes

49
Q

Exclusion ratio

A

The total investment in the contract divided by the expected return

50
Q

Cost basis

A

Owners investment in the contract; the amount of money that has been paid into the annuity via premium

51
Q

Cost basis

A

Owners investment in the contract; the amount of money that has been paid into the annuity via premium

52
Q

Annual guaranteed benefit

A

What the annuitant receives multiplied by the number of years of the annual life expectancy

53
Q

Exclusion ratio

A

Cost basis equals premium paid equals total investment of contract divided by expected return, which is the annual guaranteed benefit received by the annuitant multiplied by the number of years of life expectancy, resulting in a ratio applied to benefit payments, providing the exclusion of percentage from income tax

54
Q

Earned interest

A

Is taxable if annuitant dies before payout

55
Q

Immediate annuity

A

Begin making payments after the 1st premium was paid

56
Q

Guaranteed lifetime withdrawal benefit GLWB

A

Rider on a variable annuity allowing minimum withdrawals from invested amount without requiring annuitization. Guarantees amount against invested amount withdrawals for duration of life

57
Q

Customer would like an annuity that provides a guaranteed accumulation or payout the type of annuity they’re seeking is called

A

Annuity certain a type of annuity that provides a guarantee of accumulation or payout; Income installments for fixed period as decided by the owner dies prior to the end of the period then the designated beneficiary would receive it for the remainder of the specific period

58
Q

Which of the following annuity payout options make no additional payments regardless of when the annuitant dies

A

Life only the life only annuity pay out option has no additional payouts regardless of when the annuitant dies

59
Q

If annuitant dies before the annuity start date, which of the following would occur

A

Premiums paid plus interest earned is returned to the beneficiary

60
Q

Which of these is considered to be a disadvantage of owning a fixed annuity?

A

During periods of inflation and New will experience the decrease in purchasing power of their payments

61
Q

How do interest earning accumulate in a deferred annuity?

A

On a tax deferred basis

62
Q

What is the non-forfeiture value of an annuity before annuitization?

A

All premiums paid plus interest minus any withdrawals and surrender charges 

Life Insurance (10 decks)

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