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Flashcards in Annuity - Lesson 10 Deck (22)
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0
Q

A life annuity with period certain pays the annuitant:

A

For a specified minimum number of years, or the rest of his life, or which ever is longer.

1
Q

A period of time in which a deferred annuity builds it’s proceeds taxed deferred is referred to as:

A

An accumulation period.

2
Q

What is true about a variable annuity?

A

The value of the annuity unit may change.

3
Q

Life annuity offers protection against the risk of:

A

Living longer than anticipated

4
Q

Difference between a variable annuity and fixed annuity is:

A

Variable annuities are sold by life agents who must have a securities license.

5
Q

The annuitants benefits are guaranteed to maintain their purchasing power during inflationary periods. True or false?

A

False

6
Q

Todd purchased a life annuity with a 10-year period certain option. He died after receiving payments for six years. His beneficiary would receive:

A

Payments for four years

7
Q

Regarding variable annuity: the number of annuity units will decrease as payments are made to the annuitant. True or false?

A

False

8
Q

An annuity liquidates an estate over a period of time. True or false?

A

True

9
Q

What type of an annuity provides payments for life at regular intervals with no further payments at death?

A

Straight life

10
Q

How are annuities funded?

A
  1. Lump sum deferred
  2. Periodic payment deferred
  3. Lump sum immediate
11
Q

Which type of annuity accumulates funds in units that are tied to the value of an investment portfolio?

A

Variable annuity

12
Q

While life-insurance creates an immediate estate, annuities do what?

A

Liquidate an estate

13
Q

What is the function of the annuity?

A

To provide the annuitant with a payment that he cannot outlive.

14
Q

An annuity contract is between whom?

A

The contract owner and the insurer.

15
Q

The annuity contract owner may or may not be the annuitant. True or false?

A

True

16
Q

What is it referred to when the annuitant receives payments from the contract?

A

Annuity period

17
Q

Females pay more for an annuity contract than the male counterparts. True or false?

A

True

18
Q

How is an immediate annuity funded?

A

A single lump sum payment

19
Q

Which of the annuity income options pay the highest income to the annuitant?

A

Straight life income option

20
Q

Ina straight life income option, upon the annuitants death, no further payments are made to anyone. True or false?

A

True, there are no beneficiary in a straight life income option.

21
Q

In a cash refund option, it pays the Annuitant a payment for as long as he lives. True or false?

A

True