Texas Life and Health Group 1 Insurance Exam with Questions and Solutions

Texas Life and Health Group 1 Insurance Exam with Questions and Solutions Which of the following best describes a pure life annuity settlement option? A) Pure life provides for as long as both the annuitant and the spouse are living. B) Pure life provides payments for as long as the annuitant is alive. C) Pure life guarantees that all the proceeds will be paid out. D) Benefits are paid for a fixed period of time, specified when the policy begins to pay. ANSWER B) Pure life provides payments for as long as the annuitant is alive. Pure of straight life annuity settlement option will only pay for as long as the annuitant lives; however, if the annuitant dies after receiving the first payment, no more payments would be made to any other person. For this reason, pure life has the potential to pay larger monthly benefits than other options. Which of the following is NOT true about a joint and survivor annuity benefit option? A) Payments stop after the first death among the annuitants. B) A period certain option may be included. C) This option guarantees income for two or more recipients. D) The surviving annuitant may receive reduced payments. ANSWER A) Payments stop after the first death among the annuitants. A joint and survivor annuity will pay until the last annuitant has died; however, the surviving annuitant may receive reduced payments.