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Flashcards in Annuities Deck (25)
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1

Annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is what type?

Flexible premium deferred

2

If the current interest rate on an annuity is higher than the guaranteed rate, which rate will the owner receive?

Current

3

Main reason for purchasing an annuity?

To provide income that the annuitant cannot outlive

4

2 classifications of annuities according to the time when annuity payments begin

Immediate and deferred

5

Who bears the investment risk in a fixed annuity?

The insurer

6

Type of annuity can be purchased with single premium

Immediate

7

Annuity for someone who wants the benefit option that will pay the largest amount only for as long as the annuitant lives?

Straight life

8

Annuity settlement option provides income payments to the annuitant for the duration of his or her life and ceases at the annuitants death?

Pure life

9

In an annuity the accumulated money is converted into a stream of income during which phase?

Annuitization period

10

Licenses you need to sell annuities?

Life insurance and securities

11

How long will a life annuity with a 15 year period certain pay?

For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period, then the payments will last for 15 years

12

How soon can payments begin in an immediate annuity?

No later than 1 year from the time of the annuity purchase

13

If the annuitant dies before the annuitization period starts, what will the beneficiary receive?

Either the amount paid into the annuity or the cash value, whichever is greater

14

How long is a pure life annuity paid out?

Only for the life of the annuitant

15

Disadvantage of owning a fixed annuity as opposed to variable

During inflation, the benefit of a fixed annuity will have decreased purchasing power

16

In flexible premium payment annuities, the term flexible refers to what?

Amount of premium

17

How are annuities classified depending on how many lives they cover?

Single life and multiple life

18

With a single premium deferred annuity, when will the annuity payments become available?

No sooner than one year after the purchase

19

Diff between single premium and flexible premium payment options in a deferred annuity?

The number of payments that purchase the annuity

20

Can a business or a corporation be an annuitant?

No, an annuitant must be a natural person

21

What are the two types of refund life annuities?

Cash refund and installment refund

22

What is the diff between annuitant and beneficiary?

The beneficiary receives benefits after the annuitants death

23

Settlement option provides income to the annuitant for their life, and also guarantees payment for a specified number of years

Life income with period certain

24

Who posses all the rights in an annuity?

Annuity owner

25

What are accumulation units in annuities?

Ownership interest in the separate account (instead of buying shares, annuity holder purchases accumulation units)