Section 9 Flashcards
When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus…
Expenses and withdrawals
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
When the contract has been held for the period specified in the policy
What is another term used for a “pure” life annuity?
Life income
Which annuity allows contributions to an IRA?
Deferred
Which of the following is not a valid contract exchange?
An annuity exchanged for a life insurance policy
The interest paid during an annuities payout period is considered…
Taxable as ordinary income
Which of the following would most likely purchase an immediate annuity?
-individual wishing to contribute to a tax sheltered annuity
-Individual wanting to accumulate an investment over time
-Retiree having a lump sum to invest
-Business needing an immediate tax write off
Retiree having a lump sum to invest
An annuity which starts paying monthly benefits within a month, after issuance is called an
Immediate annuity
Which statement is incorrect concerning a tax sheltered annuity TSA?
-participants make payments from salary reductions
-normally used by charitable, educational, and religious organizations
-also known as 403B plans
-Annual investment gains are included in participant’s gross income
Annual investment gains are included in participant’s gross income
Which benefit can be found in an equity index annuity, but not a fixed annuity?
Protection against long-term inflation
The owner of a single, premium deferred annuity is entitled to do all of these, except
-Make additional payments into the annuity
-Choose the length of the payout period
-Who will be the recipient of the annuity payments
-Cash surrender the contract
Make additional payments into the annuity
A retired couple would like to maximize the amount, derived from their combined life savings, and have it payable until they both die. Which annuity would be their best choice?
Joint survivor annuity
The authority to change the beneficiary in an individual annuity, lies with the
Owner
The main purpose of an annuity is to
Create a stream of income
Which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?
Ages, 70 and 72
Ages, 60 and 80
Ages, 71 and 73
Ages, 69 and 71
Ages 71 and 73
