Chapter 17

Question 0

Promised a series of periodic payments

Answer 0

Annuitant

Question 1

Any regular stream if periodic payments

Answer 1

Annuity

Question 2

After the first annuitant dies, this person takes over the periodic stream of payments

Answer 2

Successor beneficiary

Question 3

In life insurance this means that those people with a greater than average likelihood of premature death try to purchase life insurance at regular rates

Answer 3

Adverse selection

Question 4

The risk that someone might run out of money to live on if they live far beyond the normal life expectancy

Answer 4

Longevity risk

Question 5

In negligence cases, instead of the defendant paying a lump sum to a plaintiff, the defendant (using the services of an insurer) promises a series of annuity payments to the injured party

Answer 5

Structured settlement

Question 6

Begins to pay benefits as soon as the premiums are paid in full

Answer 6

Immediate annuity

Question 7

If a person pays for an annuity and benefits do not begin at once

Answer 7

Deferred annuity

Question 8

Period at which the annuitant is paying premiums to the insurers

Answer 8

Accumulation period

Question 9

Period during which the insurer make payments to the annuitant

Answer 9

Liquidation period

Question 10

The difference between the actual investment warnings and the minimum guaranteed earnings

Answer 10

Excess interest

Question 11

Deduction of expense charge from each premium payment

Answer 11

Front-end load

Question 12

Surrender charges

Answer 12

Back-end load

Question 13

The basic annuity promise is for the insurer to agree to continue payments only so long as the annuitants is alive

Answer 13

Pure/Straight-life annuity

Question 14

Calls for payments for five years of until the annuitant dies

Answer 14

Five years certain

Question 15

If Charles lives for 32 years after the first payment, payments continue for the 32 year period

Answer 15

Period-certain life-income annuities

Question 16

If an annuitant dies before having received a total amount of annuity payments equal to the premium paid, a second beneficiary will receive the difference in cash at the time of the annuitants death

Answer 16

Cash-refund annuity

Question 17

Guarantees that if an annuitant dies before having received annuity payments equal to the premium paid, the annuity payments will continue to a successor beneficiary until the insurer pays out a total amount of dollars equal to the premium

Answer 17

Installment refund annuity

Question 18

Designed to overcome problems with inflation

Answer 18

Variable annuity