TNL LLQP Segregated Funds and Annuities

Which of the following is designed to protect a person from running out of money from "living too long"? A) Permanent insurance B) Death benefits C) Annuities D) Term insurance - Answer C) Annuities Explanation: Annuities were designed to provide a steady cash flow for an individual during her retirement years and to alleviate fears of outliving one's assets; it is referred to as longevity risk. Which of the following annuity payout options pays the highest monthly incom...

Describe the investment quality of a high-yield bond - Answer very low quality. Analogy: Investing in a high-yield bond(junk bond) is a lot like betting on a longshot at the horse races. Your horse is unlikely to win, and you will most likely lose all of your money. However, if your horse somehow wins, you stand to make a huge profit. The same logic holds with junk bonds. An investor may take a chance on such a bond if he believes that the issuer's fortunes will turn around and the ...

Simple Interest - Answer Interest Earned is paid out at the end of the term Compound Interest - Answer Interest earned is re-invested at the end of the term (Interest on Interest) Nominal rate of Return - Answer stated or advertised rate Real rate of return - Answer nominal rate of return minus rate of inflation Asset Classes - Answer - Stocks (equities) - bonds (Fixed Income) - Cash (Money market instruments) - real Estate and Commodities (sometimes)...

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made? *Irrevocable beneficiary *Tertiary beneficiary *Primary beneficiary *Revocable beneficiary - Answer *Irrevocable beneficiary (An irrevocable designation may not be changed without the written consent of the beneficiary.) When can a policyowner change a revocable beneficiary? *Anytime *After the consent of the current beneficiary *Never *Only if primary beneficiar...

Risk Avoidance - Answer avoiding a risk altogether, which is not easy to do in every situation. (i.e. By never scuba diving, you avoid the risk of dying while scuba diving.) Risk Reduction - Answer reducing the risk (i.e. The Jones bought a new alarm system for their house to reduce the chances of being robbed.) Risk Retention (or Self-Assuring) - Answer not purchasing insurance and assuming all the financial risks. Risk Transference - Answer moving the risk to s...

What kind of annuity pays income to two annuitants until their deaths? - Answer Joint and survivor annuity An annuitant would like to determine the amount of an annuity distribution that is exempt from taxation. What is used to calculate this? - Answer Exclusion ratio The systematic liquidation of a sum of money is provided by a(n) - Answer annuity Which of the following is a NOT a feature of equity-indexed annuities? - Answer Offers a maximum interest rate that ...

Variable annuities may invest premiums in each of the following, EXCEPT: - Answer Insurer's corporate business account An immediate annuity consists of a - Answer Single Premium P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? - Answer Deferred Which of these statements concerning an Individual Straight Life annuity is accurate? - ...

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 rece...

· Investments that where insurance company is owner. Instead of funds facts segregated funds have information folder · Pays for asset allocation service. · Seller qualification: licensed insurance agent instead of licensed mutual fund rep · Protection against Assuris besides MFDA · Maturity guarantee o At least 75% amount invest. · Age restriction o No more than 80-year-old · Reset dates. o Minimum holding period for TEN years o Renewable: TO PROTECT ACCRUED VALUES INS...

Accumulations units in a variable annuity: - Answer will rarely have the same value from month to month Variable products general accounts are composed of _____________ constructed to match the liabilities and guarantees of the contracts they back. - Answer conservative investments Fraternal insurance organizations operate as "associations" and function as profit making businesses. - Answer False Under the Holocaust Victims Insurance Act, claimants have until ___...