Annuity payment options Flashcards
1
Q
Cash one time payment
A
Interest immediately taxed; penalty of 10% before age 59 1/2
2
Q
Annuity certain
A
Guaranteed for a fixed period or fixed amount
3
Q
Straight life
A
Guaranteed payments for life; payment cease at annuitants death
4
Q
Life with period certain
A
The annuity payments are guarenteed for the lifetime of the annuitant and for a specified time for the beneficiary 
5
Q
Exclusion Ratio
A
Nonqualified annuity - portion of the payout is taxable (interest) Andy portion is not (premiums paid); premium was paid in on an after - tax basis anf growth was tax deffered
Qualified annuity - all of the pay out is taxable, Interest and premium paid; The premium was paid in on a pre-tax basis and the growth was tax deffered 
