Unit #5 Annuities Flashcards
What’s the difference between insurance policy and annuity ?
Insurance creates an estate
Annuity liquidates an estate through income payments
Who pays the annuity ?
The annuitant is the one whom the annuity is paid
How does single-premium immediate annuity payments begin and how are they purchase?
The payments begin no later then 12 months from the date of purchase . They may begin as early as the following month. They are purchase in one payment ( lump sum)
Single premium deferred annuity payments begin ?
They begin after 12 months from the date of purchase. They are purchase in one payment (lump sum)
How are flexible premium and level premium deferred annuities funded ?
They are funded with premiums over a period of time
Why fixed annuity recommended ?
For conservative investors a fixed annuity is recommended because it proved no risk for investors.
What type of of annuity is recommend to go andbuying a hedge against inflation and do you need your security license ?
Yes, an agent need to hold an insurance license and a securities license.variable annuity were develop to provide a hedge against inflation.
What are the two major period in an annuity ?
The accumulation period and the annuity period
What are qualified annuities funded ?
Qualified annuities are funded with pretax dollars as part of a qualified tax-deferred retirement plan. Contribution and gains are taxed upon withdrawal
Non-qualified annuities are funded?
with after tax dollars on a cost basis. Only gains are taxed upon withdrawal
Equity-indexed have the feature of fixed annuity ?
Yes, except the interest credited to the account is tied to an index such as the S&P 500. They are not variable annuities
Does the straight life payout pay the most to the recipient ?
Yes , but only for a lifetime
Does the joint life option pay out to two or more annuitants, if so when do the payments stop?
The joint life option pays two or more annuitants and if the first annuitant dies the payments stop.
The joint and survived option pays two or more annuitants, if so when do the payment stop?
The joint and survived option pays two or more annuitants and if the annuitant dies the payment will stop when the last annuitant dies
What’s the life payout option?
If the recipient dies before the principle is depleted the. The beneficiary has to pay one whole payment of what the annuity remains.
