Annuities

Question 1

What are the two phases of an annuity?

Answer 1

accumulation, and annuitization (or pay-in and pay-out)

Question 2

How long is income paid under a pure life annuity?

Answer 2

Only for the life of the annuitant

Question 3

Who bears the investment risk in a fixed annuity?

Answer 3

The insurer

Question 4

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

Answer 4

Single life and multiple life annuities

Question 5

Who possesses all the rights in an annuity?

Answer 5

Annuity owner

Question 6

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

Answer 6

Variable annuities

Question 7

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?

Answer 7

Annuity

Question 8

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

Answer 8

The number of payments that purchased the annuity

Question 9

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

Answer 9

In time of inflation, the benefits of a fixed annuity will have decreased purchasing power

Question 10

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?

Answer 10

Current

Question 11

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

Answer 11

Immediate annuity

Question 12

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

Answer 12

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

Question 13

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

Answer 13

Immediate and deferred

Question 14

What annuity settlement options provide income payments to annuity for the duration of their life, and also guarantees payment for a specified number of years?

Answer 14

Life and income with period certain

Question 15

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

Answer 15

A life insurance license, and a security license

Question 16

Whose life expectancy is taken in consideration in annuity contract?

Answer 16

Annuitant

Question 17

What is the accumulation unit in annuities?

Answer 17

Ownership interest in the separate account instead of buying shares annuity holders purchase accumulation units

Question 18

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

Answer 18

Straight life

Question 19

How soon can income payments begin and an immediate annuity?

Answer 19

No later than one year from the time of annuity purchase

Question 20

What annuity settlement options provide income payments to the annuitant for the duration of their life and ceases at the annuitant’s death?

Answer 20

Pure life

Question 21

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

Answer 21

Amount of premium

Question 22

What are the two types of refund life annuities?

Answer 22

Cash refund and installment refund

Question 23

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

Answer 23

Flexible, premium deferred annuity

Question 24

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

Answer 24

Annualization period

Question 25

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

Answer 25

Beneficiary

Question 26

If you knew tent dies before the annualization period starts what will the beneficiary receive?

Answer 26

Either the amount paid into the annuity or the cast value whatever is greater

Question 27

What causes a variable annuity benefit to vary?

Answer 27

The annuities underlying investment

Question 28

What type of annuity credits it’s interest basedupon an index such as S&P 500?

Answer 28

Equity index annuity

Question 29

What is the main reason for purchasing an annuity?

Answer 29

To provide income that the annuitant cannot outlive

Question 30

Can a business or a corporation be an annuitant ?

Answer 30

No, and a new must always be a natural person

Question 31

If there is no name beneficiary for the annuity benefit to which entities will the benefit be paid?

Answer 31

Annuitant’s estate

Question 32

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

Answer 32

Joint life annuity

Question 33

Who receives income payments from an annuity?

Answer 33

Annuitant

Question 34

With a single premium deferred annuity when will the annuity payment become available?

Answer 34

No sooner than one year after the annuity purchase

Question 35

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

Answer 35

For the life of the annuitant, unless the annuitant dies within the first 15 years of the annuitant. But here Then the payment will last for 15 years.