PSI Annuities Flashcards
which statement about the benefits of Qualified Retirement Plans is FALSE?
A) the funds in the plan grow on a tax-deferred basis
B) employees must be fully vested after 5 years
C) employer contributions are tax deductible to the employing company
D) employees are not taxed on employer contributions until money flows out of the plan
B) employees must be vested after 5 years
how does a traditional IRA differ from a Roth IRA?
A) contributions to Roth IRAs are unlimited
B) Roth IRAs allow dispersal prior to 59 1/2 without penalty
C) Roth IRAs are funded with after-tax dollars
D) all benefits from a traditional IRA are tax free
C) Roth IRAs are funded with after-tax dollars
an annuity that guarantees benefit payments for a specified number of years to the annuitant or the named beneficiary is
A) a pure life annuity
B) an annuity certain
C) a joint life annuity
D) a cash refund annuity
B) an annuity certain
Ann is age 55 and is dying of cancer. She owns a $100,00 term to 65 policy but requires $75,000 immediately to cover her hospice costs. What is an option to cover her expenses?
A) sell her policy to a viatical settlement company
B) purchase a living benefits rider
C) utilize the accelerated death benefit feature of the policy
D) borrow $75,000 from her company using the policy as collateral
A) sell her policy to a viatical settlement company
Which of the following statements regarding a pure life annuity payout option is correct?
A) benefits are payable for the life of the annuitant or beneficiary, whichever lives longer
B) benefits are payable for the life of the annuitant and will pay a reduced benefit to the spouse until the balance of the annuity is paid
C) benefits are payable for the life of the annuitant and will guarantee a minimum benefit payable to the beneficiary if the annuitant dies within a specified period
D) this option provides the highest monthly income
D) this option provides the highest monthly income
when Jack needs to be admitted to a nursing home, he has no Long Term Care coverage. He does have a $200,000 Whole Life policy that will pay up to $100,000 for his nursing home costs. This is an example of
A) annuity certain
B) living benefits option
C) viatical settlement
D) life income settlement option
B) living benefits option
an annuity owner wants to ensure that all of the principal dollars invested in his annuity will be paid to him or his beneficiaries. he should be advised to select any of the following payouts EXCEPT
A) life annuity with period certain
B) fixed period annuity certain
C) fixed amount annuity certain
D) refund life annuity
A) life annuity with period certain
the life insurance ownership provision states that all policy rights rest with the
A) insured
B) company
C) beneficiary
D) policy owner
D) policy owner
what does the insurance company do if the annuity owner dies during the accumulation period of an annuity contract?
A) pays a life income to the designated beneficiary
B) keeps the cash value in order to pay cash benefits to the contract owners who annuitize
C) return the value of the account to the designated beneficiary
D) pays a tax-free death benefit to the designated beneficiary
C) return the value of the account to the designated beneficiary
