Chapter 7 - Annuities (Chapter Exam)
Questions and Answers.
T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received
monthly payments since the inception of the annuity. If T dies, the insurance company - Answer
does NOT have to make any further payments
A Variable Annuity has which of the following characteristics? - Answer Underlying equity
investments
What is considered to be a characteristic of an immediate annuity? - Answer Benefit
payments start within one payment period of purchase
S recently received a $500,000 lump sum retirement buyout from her employer. She would like
to buy an annuity that will immediately furnish her with a guaranteed income for life. What type
of annuity is best suited for her situation? - Answer Single Premium
K is an annuitant currently receiving payments. If she were to die before receiving payments
equal to the correct value, a beneficiary will continue receiving payments until an amount equal
to the contract value has been paid. This is called a(n) - Answer Installment Refund 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 amount equal to the contract value has
been paid)
A(n) _______ annuity pays benefits based on units rather than stated dollar amounts. - Answer
variable
An immediate annuity consists of a... - Answer single premium
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? - Answer 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? - Answer fixed deferred (a fixed deferred annuity
pays out a fixed amount for life starting at a future date)
W is a 39-year old female who just purchased an annuity to provide income for life starting at
age 60. All of these would be acceptable annuity choices EXCEPT a(n) - Answer Immediate
Annuity
Questions and Answers.
T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received
monthly payments since the inception of the annuity. If T dies, the insurance company - Answer
does NOT have to make any further payments
A Variable Annuity has which of the following characteristics? - Answer Underlying equity
investments
What is considered to be a characteristic of an immediate annuity? - Answer Benefit
payments start within one payment period of purchase
S recently received a $500,000 lump sum retirement buyout from her employer. She would like
to buy an annuity that will immediately furnish her with a guaranteed income for life. What type
of annuity is best suited for her situation? - Answer Single Premium
K is an annuitant currently receiving payments. If she were to die before receiving payments
equal to the correct value, a beneficiary will continue receiving payments until an amount equal
to the contract value has been paid. This is called a(n) - Answer Installment Refund 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 amount equal to the contract value has
been paid)
A(n) _______ annuity pays benefits based on units rather than stated dollar amounts. - Answer
variable
An immediate annuity consists of a... - Answer single premium
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? - Answer 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? - Answer fixed deferred (a fixed deferred annuity
pays out a fixed amount for life starting at a future date)
W is a 39-year old female who just purchased an annuity to provide income for life starting at
age 60. All of these would be acceptable annuity choices EXCEPT a(n) - Answer Immediate
Annuity
