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Flashcards in Types of Annuities Deck (13):
1

Which of the following statements is TRUE regarding Fixed Annuities?
A
Upon annuitization, the annuity payments are level
B
A securities registration (license) is required in order to sell them
C
Premiums are allocated to separate account(s)
D
The contract owner bears the investment risk

A
Upon annuitization, the annuity payments are level

2

Ralph has selected an annuity benefit or payment option where, upon annuitization, the annuity will pay a benefit for as long as either Ralph or a co-annuitant are alive. Ralph has elected which of the following benefit or payment options?
A
Life Income Period Certain
B
Straight Life
C
Life Income Joint and Survivor
D
Joint Life

C
Life Income Joint and Survivor

3

All of the following are traits of a Fixed Annuity, except:
A
The purchasing power of a fixed dollar benefit amount decreases as the cost of living increases
B
The insurer's general account assets guarantee the fixed annuity contract
C
The insurer bears any investment risk
D
The actual rate of interest credited will be based on the state-published interest rate index

D
The actual rate of interest credited will be based on the state-published interest rate index

4

An individual owns a variable annuity. Upon annuitization, the number of Annuity Units on which the benefit amount is based will __________ from month to month.
A
Vary
B
Decrease
C
Increase
D
Remain the same

D
Remain the same

5

Which one of the following is not relevant information that should be obtained by a producer in order to present practical and affordable annuity products to a senior customer?
A
College attended
B
Source of premium payment
C
Occupation and occupational status (still working or retired)
D
Concern for preservation of capital

D
Concern for preservation of capital

6

Which of the following do Fixed and Variable Annuities have in common?
A
Who bears the investment risk of the annuity policy
B
A guarantee of a minimum rate of interest credited during the accumulation period
C
The types of settlement options available at annuitization
D
Vulnerability to loss of purchasing power over the long run

C
The types of settlement options available at annuitization

7

A(n) ________ has all of the contractual rights in an annuity policy.
A
Beneficiary
B
Annuitant
C
Insurer
D
Owner

D
Owner

8

Mr. Smith and Mrs. Smith received monthly benefits from their annuity, and upon Mr. Smith's death, Mrs. Smith receives a reduced amount. What annuity payment option did they choose?
A
Life with Cash Refund
B
Life Income Joint and Survivor
C
Joint Life
D
Life Income

B
Life Income Joint and Survivor

9

As adopted into California law, the NAIC's '2010 Model Suitability in Annuity Transactions Model Regulations' require all producers to document that an annuity sold to a senior is:
A
Through an insurer in the highest three credit ratings of a nationally recognized credit rating service
B
Suitable for that person's needs and objectives
C
Without surrender charges
D
With the knowledge and consent of the senior's adult children

B
Suitable for that person's needs and objectives

10

If the policyowner can withdraw funds from an annuity without surrender charges in the event interest crediting rates fall by more than a specific amount, this is referred to as a(n) ____________ provision.
A
Cancellation
B
Free look
C
Refund
D
Bailout

D
Bailout

11

If an annuity uses units instead of dollars to determine the value of the policy, then it is a(n) _________ annuity.
A
Fixed
B
Indexed Annuity
C
Variable
D
Market Value Adjustment

C
Variable

12

The Insurance Code requires producers who meet with prospective clients age 65 and older in their homes for the purpose of transacting life insurance, annuities, or disability insurance products to provide a written notice of the first meeting at least how many hours in advance?
A
72
B
48
C
96
D
24

D
24

13

If an annuity is purchased in December and monthly benefits begin in January of the following year, what type of annuity is it?
A
Variable Retirement Annuity
B
Flexible Premium Tax Sheltered Annuity
C
Single Premium Fixed Annuity
D
Single Premium Immediate Annuity

D
Single Premium Immediate Annuity