More Annuities

Question 1

Fixed annuities

Answer 1

• interest rates are guaranteed
• income payments do not vary from one payment to the next
• premiums are held in the company‘s general account
• Company guarantees the Specified dollar amount for each; length is determined by the settlement option chosen by the annuitant. Inflation may decrease purchasing power 

Question 2

Variable Annuities

Answer 2

• Growth is not guaranteed
• premiums are held in a separate account
• is a security
• Level benefit payout
• policy owner assumes the risk. Can keep pace with inflation

Question 3

Equity Indexed Annuties

Answer 3

• like fixed annuities  that invest on a relatively aggressive basis to aim for a higher return
• has guaranteed minimum interest rate
• less risky than a variable annuity or mutual fund but are expected to earn a higher interest rate

Question 4

Immediate annuities

Answer 4

• Payment begins within 12 months

- Single premium payment only

Question 5

Deferred annuities

Answer 5

• payment begins after 12 months

-  Single, level, or flexible payments