Ch 3 Flashcards Preview

CPCU 556 > Ch 3 > Flashcards

Flashcards in Ch 3 Deck (12):
1

Annuity death benefit that is the greater of cash value at death, net premiums, or cash value on some previous date.

Stepped-up

2

Annuity death benefit that pays the greater of cash value or net premiums accumulated at a specific interest rate. 4-6%

Rollup

3

Annuity death benefit that is the greater of cash value at death or net premiums (total premium - withdrawals)

Traditional

4

Annuity payments end at death with no refund of excess purchase price.

Straight life annuity.

5

Annuity with payments guaranteed for a minimum number of years. Remaining payments are made to estate if annuitant dies.

Life annuity certain

6

Annuity where all or part of purchase price is refunded if annuitant dies before the principal sum is liquidated.

Refund annuity

7

Annuity with lifetime which fluctuates depending on the insurers investment performance.

Variable annuity

8

How are distributions of a nonqualified annuity taxed?

LIFO

9

Annuity death benefit with predetermined percentage increase to offset beneficiary's income tax liability.

Enhanced earning benefit.

10

How does tax treatment of life insurance differ from that it an annuity?

Life insurance is tax free; annuities are taxed

11

Does an annuity have mortality charges?

No

12

In a variable annuity, what are mortality and expense charges applied to?

The variable subaccount