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CLU - 311 > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

Annuity

A

A periodic payment to begin at a specified or contingent date and to continue for a fixed period or for the duration of a designated life or lives

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2
Q

Annuitant

A

The person whose life governs the duration of benefit payments under a life annuity: usually also the person who receives periodic annuity payments

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3
Q

Annuity Certain

A

An annuity with benefit payments that continue for a definite period of time without being linked to the duration of a specified human life

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4
Q

Life (Whole Life) Annuity

A

An annuity whose benefit payments continue for the duration of a designated life

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5
Q

Temporary life Annuity

A

An annuity whose benefit payments continue until the earlier of the death of a designated person or the end of a specified period of time

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6
Q

Joint-Life Annuity

A

An annuity with benefit payments that continue only until the first death among specified lives

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7
Q

Joint-and-Last Survivor Annuity

A

An annuity with benefit payments that continue until the last death among specified lives

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8
Q

Immediate Annuity

A

An annuity with benefit payments that begin one payment interval (for example, 1 month) after the date of purchase

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9
Q

Deferred Annuity

A

An annuity for which benefit payments begin more that one payment interval after the date of purchase

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10
Q

Accumulation Period

A

The period of time in a deferred annuity during which the purchase price is deposited with the insurer and accumulated at interest

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11
Q

Liquidation Period

A

The period of time which annuity benefit payments are made

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12
Q

Pure (Straight Life) Annuity

A

A life annuity that provides no guaranteed minimum number of benefit payments or refund of the purchase price. Also known as a pure annuity

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13
Q

Refund Annuity

A

A life annuity that promises to return in some manner a portion or all of the purchase price

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14
Q

Fixed Annuity

A

An annuity that provides a stated periodic dollar benefit, regardless of the insurer’s investment return

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15
Q

Variable Annuity

A

An annuity with benefit payments that very depending on the performance of selected blocks on the insurer’s invested assets

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16
Q

Life Annuity Certain

A

A life annuity that provides a guaranteed minimum number of benefit payments whether the annuitant lives or dies. It is a combination of annuity certain and a pure deferred life annuity.

17
Q

Installment Refund Annuity

A

A refund annuity specifying that if the annuitant dies before receiving total benefit payments equal to the purchase price of the annuity, the difference will be refunded in the form of continuing benefit payments

18
Q

Cash Refund Annuity

A

A refund annuity that specifies if the annuitant dies before receiving total benefit payments equal to the purchase price of the annuity, all or a stated percentage of the difference will be refunded in cash

19
Q

50% Refund Annuity

A

A refund annuity that pays a benefit to a beneficiary if the annuitant dies before receiving benefits equal to half the cost of the annuity. Installments continue until the total benefits paid equal half the cost of the annuity.

20
Q

Cash Option

A

An option the allows an annuitant, at the start of the liquidation period, to withdraw the funds in cash, rather than as an annuity

21
Q

Accumulation Unit

A

A unit or a variable annuity that is purchased during the annuity’s accumulation stage. Units are revalued each month

22
Q

Annuity Unit

A

A variable annuity’s accumulation units are converted to a fixed number of annuity units at the beginning of the liquidation period. The dollar value of each unit fluctuates with the investment performance of the separate account underlying the annuity

23
Q

Equity Indexed Annuity

A

An annuity that guarantees a minimum fixed rate of interest credits but also provides higher credits if a specified common stock index rises sufficiently

24
Q

Structured Settlement

A

An agreement to pay a specified set or periodic benefits in lieu of (or in addition to) a sing lump-sum amount

25
Q

Step-Rate Annuity

A

An annuity for which benefits increase, possibly at a compound annual rate. Step-rate annuities are often used in structured settlements.

26
Q

Impaired Risk Annuity

A

An annuity that considers the annuitant’s reduced life expectancy in the underwriting process and increases the annuity payments (or lowers the premium) accordingly

CLU - 311 (20 decks)

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