ANNUITIES Flashcards

1
Q

A retirement plan for certain employees of public schools, employees of specific tax-exempt organizations, and certain ministers

A

403(b) Plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

applies to annuities. if an annuity is exchanged for another annuity, a “gain” for tax purposes is not realized. This is also true for a life insurance policy or an endowment contract exchanged for an annuity. However, an annuity cannot be exchanged for a life insurance policy. This provision in the tax code allows you, as a policy holder, to transfer funds from a life insurance, endowment, or annuity to a new policy, without having to pay taxes

A

1035 contract exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

when the premiums an annuitant pays into annuities are credited as accumulation units. This may continue between the time after premiums have ceased, but the payout has not yet begun. At the end of this period, accumulation units are converted to annuity units

A

accumulation period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

make up the value of contributions made by the annuitant less the deduction for expenses. The value of each of these is a credit to the individual’s account and varies depending on the value of the underlying stock investment

A

accumulation unitso

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

one to whom an annuity is payable or a person upon the continuance of whose life further payment depends

A

annuitant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

the converted accumulation units once variable annuity benefits are paid out to the annuitant. At the time of the initial payout, the annuity unit calculation is made. From then on, the number of these remain the same for that annuitant

A

annuity units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

provides that , upon the death of an annuitant before payments totaling the purchase price have been made, the excess of the amount paid by the purchaser over the total annuity payments received will be paid in one sum to designated beneficiaries

A

cash refund option

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

provide for postponement of the payment of an annuity until after a specified period or until the annuitant attains a specified age. May be purchased on either a single-premium or flexible premium basis. Typically do not begin making income payments for at least one year after the date of purchase

A

deferred annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

fixed deferred annuity that offers the traditional guaranteed minimum interest rate and an excess interest feature that is based on the performance of an external equity’s market index

A

equity indexed annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

a fraction used to determine the amount of annual annuity income exempt from federal income tax. It is the total contribution or investment in the annuity divided by the expected ratio

A

exclusion ratio

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

provides a guaranteed rate of return. the interest payable for any given year is declared in advance by the insurer and is guaranteed to be no less than a minimum specified in the contract. With these, the investment risk is on the insurer

A

fixed annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

provide for payment of annuity benefit at one payment interval from the date of purchase. Can only be purchased with a single payment. Typically begin paying income within one month of purchase

A

immediate annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

provides for payment of the annuity to two people. If either person dies, the same income payments continue to the survivor for life. When the surviving annuitant dies, no further payments are made to anyone. A full survivor option pays the same benefit to the survivor. A two-thirds survivor option pays two-thirds of the original joint benefit. a one-half survivor option pays one-half of the original joint benefit

A

joint life and survivor option

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

designed to pay the annuitant an income for life, but guarantees a definite minimum period of payments. Provides income to the annuitant for life, but guarantees a minimum period of payments Thus, if the annuitant dies during the specified period, benefit payments continue to the beneficiary for the remainder of that period

A

life with period certain annuity (life annuity with term-certain option)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

can be attached to a deferred annuity that features fixed interest rate guarantees combined with an interest rate adjustment factor that can cause the actual crediting rates to increase or decrease in response to market conditions. Instead of having the annuity’s interest rate linked to an index as with the equity-indexed annuity, an MVA’s annuity’s interest rate is guaranteed fixed if the contract is held for the period specified in the policy. The market-value adjustment feature only applies if the contract is surrendered before the contract period expires. Otherwise, the annuity functions the same way a fixed annuity does

A

Market Value Adjustment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

an annuity income option that guarantees a definite minimum period of payments ID: 10 years

A

Period certain annuity

17
Q

describes an annuity owner making multiple premium payments to accumulate principal. typically, after the initial premium, these payments are flexible with frequency and amount

A

periodic payment annuity

18
Q

the original sum of money paid into an annuity through premiums

A

Principal

19
Q

an annuity for which the entire premium is paid in one sum at the beginning of the contract period. This can be a deferred or _______ _______ ______.

A

single premium annuity

20
Q

annuity income option that pays a guaranteed income for the annuitant’s lifetime after which payments stop

A

straight life annuity

21
Q

shift the investment risk from the insurer to the contract owner. Similar to a traditional, fixed annuity in that retirement payments will be made periodically to the annuitants, usually over the remaining years of their lives. Under this, there is no guarantee of the dollar amount of the payments; they fluctuate according to the value of the account invested, primarily in common stocks. Invest deferred annuity payments in an insurer’s separate accounts instead of an insurer’s general accounts (which allow the insurer to guarantee interest in a fixed annuity). because they are based on non-guaranteed equity investments (such as common stock), a sales representative who wants to sell such contracts must be registered with the Financial Industry Regulatory Authority (FINRA) as well as hold a state insurance license

A

Variable Annuity