7 - Annuities Exam Questions and Answers with Complete Solution Rated A+

Document Content and Description Below

7 - Annuities Exam Questions and Answers with Complete Solution Rated A+ N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N... purchase? -✔✔ Fixed Deferred A Fixed Deferred annuity pays out a fixed amount for life starting at a future date. G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer -✔✔ Does not have to make any further payments With a Straight Life Annuity, the insurer does not have to make further payments after the annuitant dies. Which of the following is a characteristic of a variable annuity? -✔✔ Underlying equity investments Variable annuities involve underlying equity investments in a separate account. How does an indexed annuity differ from a fixed annuity? -✔✔ Indexed annuity owners receive credited interest tied to the fluctuations of the linked index An immediate annuity consists of a -✔✔ single premium An immediate annuity has a single premium. Which of the following is NOT included in an annuity contract? Nonforfeiture benefit Free-Look period Beneficiary AD&D rider -✔✔ All of these are included in an annuity contract EXCEPT an Accidental Death & Dismemberment (AD&D) rider. Which type of contract liquidates an estate through recurrent payments? -✔✔ Annuity A contract that provides for the liquidation of all or part of an estate through periodic payments is known as an annuity. The type of annuity that can be purchased with one monetary deposit is called a(n) -✔✔ Immediate annuity An immediate annuity is purchased with one monetary deposit. S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? -✔✔ Single Premium Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date. [Show More]

Last updated: 10 months ago

Preview 1 out of 6 pages