Chapter 14

Question 1

A form of insurance that provides a person with a future income while they are still alive is called..?

Answer 1

annuity

Question 2

An annuity is or is NOT a life insurance policy

Answer 2

is NOT

Question 3

Life insurance creates a(n) _________?

Answer 3

immediate estate

Question 4

_______ liquidate an estate.

Answer 4

Annuities

Question 5

The period of time when the annuity owner makes payments into the annuity is called..?

Answer 5

accumulation period

Question 6

The period of time when the annuity owner stops paying into the annuity and starts receiving money is called..?

Answer 6

annuitization period

Question 7

There are ____ people involved in an annuity

Answer 7

3

Question 8

The people involved in an annuity are..?

Answer 8

1.) owner
2.) annuitant
3.) beneficiary

Question 9

There are _____ types of annuities

Answer 9

3

Question 10

The types of annuities are:

Answer 10

1.) fixed annuities
2.) variable annuities
3.) equity-indexed annuities

Question 11

The _______ takes on the risk of the separate account

Answer 11

insured (owner/annuitant)

Question 12

In order to sell a variable annuity, you need both a ______ and ________.

Answer 12

life agent license, a securities license

Question 13

Premiums paid into a variable annuity are invested into a _______ which is organized as a trust for the benefit of the annuitant.

Answer 13

separate account

Question 14

The account associated with this annuity is linked to a stock market is called..?

Answer 14

equity-indexed annuities

Question 15

Annuities have 2 premium payment options:

Answer 15

1.) single payment/lump sum
2.) periodic

Question 16

Annuities have 2 payout options. Please name the options:

Answer 16

1.) immediate
2.) deferred

Question 17

_________ provides payments to the annuitant as long as they live, with no guarantee that all the money will be paid out.

Answer 17

Life (aka straight life or pure life)

Question 18

Payments provided to the annuitant for as long as they live, with a guaranteed minimum period of payments is called..?

Answer 18

life with period certain

Question 19

Payments provided to the annuitant for as long as they live and, at the annuitant’s death, any unpaid principal is refunded to the beneficiary in either cash or installment payments is called..?

Answer 19

life with refund