Annuity

When is payment made on an ordinary annuity?

• Beginning of the period

• Middle of the period

• First 3 days of the period

• End of the period

When is payment made on an annuity due?

• Beginning of the Period

• Middle of the period

• First 3 days of the period

• End of the period

a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future.

a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future.

What is the main difference between an annuity and a compound interest investment?

• A series of payments is made for annuities.

• Compound interest investments are for a shorter time period.

• The cash value of annuities can be figured using the compound interest table.

• Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.

_________ is concerned with creating an estate, whereas ________ are concerned with liquidating an estate

• Annuities, insurance

• Perpetuities, annuities

• Insurance, perpetuties

• Insurance, annuities

The amount of an annuity payment is based upon which of the following factors?

• Starting principal

• Interest

• Income period

• All of the above

Before the payout period begins, the annuity is in the

• Premium phase

• Collection phase

• Accumulation phase

• None of the choices

The principal reason for investing in annuities is:

• to create an estate

• as a retirement tool

• to leave an inheritance

• All of the choices

Since there is no possibility of loss, the insurer bears the burden of risk in a fixed annuity

• True

• False