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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
Q

annuity product that calculates a different interest rate on the funds if they are cashed in versus annuitized

A

Two Tiered Annuity

26
Q

annuity that combines the accumulation of retirement funds within an annuity with decreasing term to age 65 life insurance policy

A

Retirement Income Annuity

27
Q

pays a fixed interest rate, but if surrendered early, the contract will be recalculated based upon the market performance throughout the policy term.

A

Market Value Adjusted Annuity

28
Q

provisions required to be written into the insurance contract according to state law

A

Required Provision

29
Q

the clause states the parties, promise and perils covered

A

Insuring Clause

30
Q

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

A

Entire Contract/Changes

31
Q

the period of time the company has to challenge the information on the application (2 years)

A

Incontestable Clause

32
Q

the clause allows the insurer to adjust the death benefit, to reflect the actual age that the contract should have been based upon

A

Misstatement of Age and Sex

33
Q

period of time the owner has to pay the premium after the due date

A

Grace Period

34
Q

clause that allows the insured, after dropping coverage, to get the policy reinstated if the rules set forth by the company are satisfied

A

Reinstatement Clause

35
Q

clause says the owner has all the rights in a policy

A

Ownership Clause

36
Q

to give rights of the policy to another party

A

Assignment

37
Q

total relinquishment of rights and ownership

A

Total Assignment (Permanent)

38
Q

the owner gives up some of his/her ownership rights for a temporary period of time

A

Partial Assignment (Temporary assignment)

39
Q

What is the Time Limit on Lawsuits

A

the company has 60 days to pay the claim and the insured has 3 years (some states 2) to sue

40
Q

what is the rule on backdating

A

6 months in order to save age (does not change incontestability clause)

41
Q

10 day time period that begins when the policy is delivered

A

Free Look Provision

42
Q

provisions that may be added by the company

A

Discretionary Provisions

43
Q

the company will not pay if the insured commits suicide within the first ???? years

A

Suicide Clause- 2 years

44
Q

if occupations or hobbies are dangerous the company may add this exclusion

A

Hazardous Occupation Clause

45
Q

when the insured charges a higher premium to cover a higher risk

A

Rate Up

46
Q

first person designated to receive the death benefit

A

Primary Beneficiary

47
Q

if the primary beneficiary has died, who is next in line?

A

Contingent Beneficiary

48
Q

beneficiary designation that may only be changed if the beneficiary agrees to give up their designation

A

Irrevocable Beneficiary

48
Q

a beneficiary designation that can be changed by the owner

A

Revocable Beneficiary

49
Q

the process of determining and transferring ownership of an estate

A

Probate

50
Q

in a simultaneous accident, when the order of death cannot be established, it will be assumed that the insured outlived the primary beneficiary

A

Uniform Simultaneous Death Act

51
Q

beneficiary designation distributes the benefit to the surviving beneficiaries on an equal basis

A

Per Capita

52
Q

beneficiary designation that distributes the deceased beneficiary’s portion of the proceeds to his/her heirs in descending order; through the root

A

Per Stirpes

53
Q

condition written into the policy that is designed to protect the proceeds from the beneficiary and their creditors

A

Spendthrift Clause

L&H (10 decks)

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