LI Part 11

G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer

• Does not have to make any further payments

• Must continue to make monthly payments to G’s beneficiary’s life

•   Must pay G’s beneficiary the difference between the amount paid to G and $50,000 in a lump sum

•   Must continue to make monthly payments to G’s beneficiary until the difference between the amount paid to G and $50,000 is paid out

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

•   Fixed Certain

• Joint and Full Survivor

• Life Annuity with Period Certain

• Installment refund

How does an indexed annuity differ from a fixed annuity?

•   Fixed annuity owners receive credited interest tied to the fluctuations of the linked index

•   Indexed annuity owners receive credited interest tied to the fluctuations of the linked index

•   Fixed annuity owners have a separate investment account

• Indexed annuity owners receive annual dividends

Which of these statements concerning an Individual Straight Life Annuity is accurate?

•   Life Expectancy of the annuitant is not a factor

•   The payments are received tax-free

• Only available to employees of nonprofit charitable, educational, and religious organizations

•   Payments are made to an annuitant for life

Which of the following is NOT included in an annuity contract?

•   Nonforfeiture benefit

•   Free-look period

•   Beneficiary

•   AD&D rider

The Annuity that represents the largest possible monthly payment to an individual annuitant is a(n):

•   Cash refund

•   Installment refund

•   Straight life annuity

•   Life Annuity with Period Certain

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

• Fixed deferred

• Fixed period

• Fixed immediate

• Fixed variable

Which of these is an element of a Single Premium annuity?

• Deferred payment

•   Lump-sum payment

• Fixed income

• tax-deductible

An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an equal to the contract value has been paid. This type of annuity is called:

• an installment Refund annuity

• a straight life annuity

• a cash refund annuity

• a joint life annuity

If an annuity is terminated prior to beginning of the income payment period, the contract owner receives:

• No refund of money

• All premiums paid up to the date of termination

• Reimbursement of all expenses deducted from the contract value

• The contract surrender value at that time