Annuities and Life Insurance

Question 1

Insurance contract designed to provide retirement income

Answer 1

Annuity

Question 2

If the annuity is cancelled 7-10 years from issue

Answer 2

Surrender charges

Question 3

Investors pay premiums to the insurance company that is invested into the company’s general account. Company has monthly payouts, company has investment risk

Answer 3

Fixed Annuity

Question 4

The fixed payment an annuitant receives loses buying power over time due to inflation

Answer 4

Purchasing Power Risk

Question 5

Credits interest to annuitants account, max and minimum guaranteed interest rate. Long surrender charge period

Answer 5

Index Annuity

Question 6

Premium payments go into a separate account (like a MF), returns are not guaranteed, annuitant assumes risk

Answer 6

Variable Annuity

Question 7

Purchased with a lump sum, payment is delayed until a later date selected by annuitant

Answer 7

Single Premium Deferred Annuity

Question 8

allows investment over time, benefit payments delayed until a later date selected by annuitant

Answer 8

Periodic payment deferred annuity

Question 9

purchased with lump sum, payout of benefits start within 60 days

Answer 9

Immediate Annuity

Question 10

Insurance company contributes an extra 3-5% of the premium payment, but there are higher fees and expenses on the account

Answer 10

Bonus Annuities

Question 11

Variable Annuity growth phase

Answer 11

Accumulation phase

Question 12

Variable annuity payout phase

Answer 12

Annuity phase

Question 13

Conservative projection of the performance of the separate account over the estimated life of the contract

Answer 13

AIR

Question 14

Insurance company pays the annuitant for life. Payments stop at death. No beneficiary

Answer 14

Straight Life Annuity

Question 15

Paid for life, guaranteed 10-20 year periodic payments to beneficiary if death occurs during that time

Answer 15

Life Annuity with Period Claim

Question 16

Guarantees payments over two lifetimes

Answer 16

Joint Life with Last Survivor Annuity

Question 17

Minimum number of payments are made upon retirement. Value leftover in account after death goes lump sum to beneficiary. Is a rider option added to other options

Answer 17

Unit Refund Option

Question 18

Policy has a level premium, death benefit and cash value is guaranteed for life of policy

Answer 18

Whole Life Insurance

Question 19

Policy has a fixed, scheduled premium. Guaranteed minimum death benefit. Rest of premium is put in separate account, cash value not guaranteed

Answer 19

Variable Life Insurance

Question 20

Flexible premiums only invested in separate accounts and cash values are not guaranteed

Answer 20

Universal Variable Life Insurance

Question 21

Contract exchange provision must be available for…

Answer 21

Two years

Question 21

Cash Value is calculated…

Answer 21

Monthly

Question 21

Death benefits are calculated…

Answer 21

Annually

Question 22

Unit Values are calculated…

Answer 22

Daily

Question 23

Maximum sales charge over the life of a contract

Answer 23

9%

Question 24

Voting Rights of Variable Life Insurance

Answer 24

one vote per $100 of cash value in separate account

Question 24

45 days after application or 10 after owner receives the policy

Answer 24

Free Look Period

Question 25

Refund Provisions for…

Answer 25

Two years

Question 26

Percent of cash value that must be available for a policy loan after 3 years

Answer 26

75%

Question 27

Number of months contract exchange provision must be in place
You can also click the terms or defini

Answer 27

24