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L&H > Chapters 3-4 Annuities & Life Provisions > Flashcards

Chapters 3-4 Annuities & Life Provisions Flashcards

1
Q

liquidation of an estate

A

Annuity

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2
Q

the party that controls the policy

A

Owner

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3
Q

the party the annuity is based upon; when they die the policy ends

A

Annuitant

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4
Q

the time period in which the annuitant makes payment into the annuity

A

Accumulation Period

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5
Q

owner of the annuity makes a single payment into the plan and requests income right away

A

Immediate Annuity

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6
Q

the process of moving the accumulated money from the accumulation side to the income stream sid

A

Annuitize

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7
Q

an annuity in which annuitization is delayed; the owner decides at what time, if ever, to cross the line of annuitization

A

Deferred Annuity

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8
Q

annuity funded with after-tax dollars

A

Non-Qualified

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9
Q

annuity funded with pre-tax dollars (IRA or 401K)

A

Qualified

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10
Q

Money from an annuity is distributed in what order

A

LIFO

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11
Q

annuity companies fee for early withdrawal

A

Surrender Charge

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12
Q

time period when the annuitized product is paid out or liquidated

A

The Annuity Period (pay-out/liquidation)

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13
Q

annuities designed to pay out as long as the annuitant is alive

A

Life Annuities

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14
Q

pays an income stream of both principal and interest until the annuitant dies; at death the income ends

A

Straight Life/Life only

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15
Q

guarantees an income for life with a minimum guarantee based upon a period of time chosen by the annuitant

A

Life Annuity w/Period Certain

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16
Q

guarantees an income for life with a minimum guarantee based upon the amount the annuitant annuitized

A

Refund Life Annuity

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17
Q

guarantees payment throughout two lives; payment ends at death of survivor

A

Joint and Survivor Life Annuity

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18
Q

does NOT guarantee an income for life; the total principal and interest earned throughout the liquidation phase will be paid out by the company

A

Annuity Certain

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19
Q

annuity that pays out over a specific period of time

A

Fixed Period

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20
Q

annuity where the annuitant chooses the amount and the company establishes the term based on how long the funds will last

A

Fixed Amount

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21
Q

the formula used on the annuity side to determine which portion of the payment is taxed vs not taxed

A

Exclusion Ratio

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22
Q

annuities in which the insurance company pays an interest to the owner for the use of his/her money

A

Fixed Annuities

23
Q

annuity that takes the cash value in the product and invests it in a separate account chosen by the insured

A

Variable Annuities

24
Q

an annuity that takes the cash value in the product and pays an interest based upon the change in a particular equity index

A

Equity Indexed Annuity

25
annuity product that calculates a different interest rate on the funds if they are cashed in versus annuitized
Two Tiered Annuity
26
annuity that combines the accumulation of retirement funds within an annuity with decreasing term to age 65 life insurance policy
Retirement Income Annuity
27
pays a fixed interest rate, but if surrendered early, the contract will be recalculated based upon the market performance throughout the policy term.
Market Value Adjusted Annuity
28
provisions required to be written into the insurance contract according to state law
Required Provision
29
the clause states the parties, promise and perils covered
Insuring Clause
30
the policy and any attachments (including the application) compromise the contract-states what makes up the total contract-only the executive office of the company can make changes
Entire Contract/Changes
31
the period of time the company has to challenge the information on the application (2 years)
Incontestable Clause
32
the clause allows the insurer to adjust the death benefit, to reflect the actual age that the contract should have been based upon
Misstatement of Age and Sex
33
period of time the owner has to pay the premium after the due date
Grace Period
34
clause that allows the insured, after dropping coverage, to get the policy reinstated if the rules set forth by the company are satisfied
Reinstatement Clause
35
clause says the owner has all the rights in a policy
Ownership Clause
36
to give rights of the policy to another party
Assignment
37
total relinquishment of rights and ownership
Total Assignment (Permanent)
38
the owner gives up some of his/her ownership rights for a temporary period of time
Partial Assignment (Temporary assignment)
39
What is the Time Limit on Lawsuits
the company has 60 days to pay the claim and the insured has 3 years (some states 2) to sue
40
what is the rule on backdating
6 months in order to save age (does not change incontestability clause)
41
10 day time period that begins when the policy is delivered
Free Look Provision
42
provisions that may be added by the company
Discretionary Provisions
43
the company will not pay if the insured commits suicide within the first ???? years
Suicide Clause- 2 years
44
if occupations or hobbies are dangerous the company may add this exclusion
Hazardous Occupation Clause
45
when the insured charges a higher premium to cover a higher risk
Rate Up
46
first person designated to receive the death benefit
Primary Beneficiary
47
if the primary beneficiary has died, who is next in line?
Contingent Beneficiary
48
beneficiary designation that may only be changed if the beneficiary agrees to give up their designation
Irrevocable Beneficiary
48
a beneficiary designation that can be changed by the owner
Revocable Beneficiary
49
the process of determining and transferring ownership of an estate
Probate
50
in a simultaneous accident, when the order of death cannot be established, it will be assumed that the insured outlived the primary beneficiary
Uniform Simultaneous Death Act
51
beneficiary designation distributes the benefit to the surviving beneficiaries on an equal basis
Per Capita
52
beneficiary designation that distributes the deceased beneficiary's portion of the proceeds to his/her heirs in descending order; through the root
Per Stirpes
53
condition written into the policy that is designed to protect the proceeds from the beneficiary and their creditors
Spendthrift Clause

L&H (17 decks)

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