E. Annuities Flashcards
A contract that will pay a specified indemnity to its owner over a period of time is an __________.
Annuity
Annuity tables are different than mortality tables since there is no __________ __________.
Insurance protection
True or False
Insurers don’t take the money from annuitants who die too soon and pay it to those who live too long.
False
Insurers do take the money from annuitants.
True or False
If an insured dies during the accumulation period of an annuity, the account value will be paid to the insured’s beneficiary, who is responsible for taxes on interest earned.
True
The __________ _____ __________ on an annuity become effective as of the contract date.
rights of ownership
The __________ is the party whose life the benefits are based upon.
annuitant
Although annuity benefits paid to a beneficiary are usually taxable upon the death of the owner/ annuitant, beneficiaries who are spouses may continue the contract on a tax deferred basis as the __________ __________.
Contingent owner
__________ provide life insurance protection. Annuities do not.
Endowments
Annuities are opposite of life insurance. Life insurance creates an estate. Annuities systematically liquidates an estate over a period of time.
True or False
True
All annuities are insurance __________, although often sold by bankers with Life insurance licenses.
Products
Annuities are often used as life insurance __________ __________.
settlement options
An __________ __________ begins paying out immediately after the initial premium is paid.
immediate annuity
The premium for a $100,000 immediate annuity is __________, regardless of the annuitant’s age, health, or gender. It is a payout that depends on these factors.
$100,000
__________ are often purchased with a lump sum upon retirement.
Single premium immediate annuities (SPIAs)
In order to be considered a __________ __________ deferred annuity, there must be a period longer than one benefit payment interval before payments begin.
single-premium
