Annuities Quiz

Question 1

A(n) _______________ annuity pays benefits based on units rather than stated dollar amounts

Answer 1

Variable

Question 2

An immediate annuity consist of a:

Answer 2

Single premium

Question 3

An individual who purchases a life annuity is given protection against:

Answer 3

The risk of living longer than expected

Question 4

P, age 50, purchased an annuity that P will fund with $500 per month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

Answer 4

Deferred

Question 5

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Answer 5

Life annuity with Period Certain.

Question 6

W is a 39-year-old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices, except:

Answer 6

Immediate annuity

Question 7

What type of annuity has a cash value that is based upon the performance of its underlying investment funds?

Answer 7

Variable

Question 8

Which type of contract liquidates an estate through recurrent payments?

Answer 8

Annuity contract

Question 9

The type of annuity that can be purchased with one monetary deposit is called a(n)

Answer 9

Immediate annuity

Question 10

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)

Answer 10

Installment refund annuity