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Flashcards in Chapter 5 Deck (28):
1

If there is no company wide annuity contract, what annuity contract could you get?

Individual

2

A deferred annuity is surrendered prior to annuitization. What is the best nonforeiture value of the annuity

Surrender value skunks be equal to 100% of paid premium minus any prior withdrawals ahs surrendur charges

3

If deferred annuity is surrendered before annuitization period what will happen

Nonforeiture option guarantees a surrender value of the contract

4

Which annuity option allows the annuitant to pluck their own time and payment amounts

Installments for a fixed period

5

If a retirement plan is chosen where a couple gets a stipend every month but if one dies it becomes half a stipend until they die, what settlement option did they choose

Joint and survivor

6

Which provision in annuity contracts allows owner to surrender annuity if interest rates drop to a specified level

Bail out

7

Advantage to having qualified annuity

Favorable tax treatment

8

Where is the money placed from a monthly annuity premium

The insurance companies general account

9

The equity in an equity index annuity is linked to

An index like standard and poors 500

10

Describe annuitant

Must be a natural person
Life expectancy is considered
Receive annuity benefits

11

What is a contract that provides sweet income for 2 or more people with income stopping upon first death of insured

Joint life annuity

12

An agent selling variable annuities must be registered with

FINRA

13

What's an accumulation period of annuity

Period in which payments into annuity grow tax deferred

14

If annuitant dies during the accumulation period who revives the benefits

Beneficiary

15

Can group annuity be owned by individual employees

No

16

Recommendations must be suitable on

Financial situation
Tax status
Investment objectives
Risk tolerance
Any other info

17

Uses of annuities

Lump sum settlements
Qualified retirement plans
Retirement income
Education funds

18

2 sides to annuities

Fixed (stated interest rate)
variable (underlying investments)

19

Fixed annuity

Guaranteed rate of interest
Guaranteed income payment amounts
Premium invested in general accounts
Life insurance license required

20

Variable annuity

Not guaranteed rate of interest
Not guaranteed income payment amounts
Premium invested in separate accounts
Life insurance and security license required

21

Single life vs multiple lives

Single life covers 1
Multiple life is joint or joint survivor

22

Deferred annuity

Lump sum in beginning or periodic payments for 1 year before payments begin

23

Immediate annuity

Lump sum at beginning and payments begin within 1 year

24

Annuity: Premium payment options

Single premium or flexible premium

25

Accumulation annuity

Money goes up over time

26

Date of annuitization

Money stays flat over time

27

Annuitization annuity

Money goes down over time

28

Annuity periods

Owner pays annuity (accumulation)
Annuity pays annuitant (annuitization)