Chapter 7 Annuities Quiz
This flashcard set covers key annuity concepts, including variable and fixed annuities, deferred and immediate options, refund provisions, investment vehicles, and tax treatment. It also clarifies features of TSAs and equity-indexed annuities.
a variable annuity has which of the following characteristics
underlying equity investments
Key Terms
a variable annuity has which of the following characteristics
underlying equity investments
a contract owner terminates an annuity before the income payment period begins. the owner will then recieve
the current contract surender value
what is the basic function of an annuity
the systematic liquidation of accumulated funds
a 45 year old woman won $100,000 in a scratch off lottery ticket. she purchased an annuity that will pay her $1500 per month beginning at the age of 60. which of these annuities did this woman purchase?
deferred fixed annuity
which of the following are equity indexed annuities typically invested in
s&p 500
type of tax deferred annuity whose credited interest is linked to an equity...
variable annuities may invest premiums in each of the following except
insureres coporate business account
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| Term | Definition |
|---|---|
a variable annuity has which of the following characteristics | underlying equity investments |
a contract owner terminates an annuity before the income payment period begins. the owner will then recieve | the current contract surender value |
what is the basic function of an annuity | the systematic liquidation of accumulated funds |
a 45 year old woman won $100,000 in a scratch off lottery ticket. she purchased an annuity that will pay her $1500 per month beginning at the age of 60. which of these annuities did this woman purchase? | deferred fixed annuity |
which of the following are equity indexed annuities typically invested in | s&p 500 type of tax deferred annuity whose credited interest is linked to an equity index |
variable annuities may invest premiums in each of the following except | insureres coporate business account |
which of these is an element of a single premium annuity | lump sum payment |
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 an | installment refund annuity this 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. |
the type of annuity that can be purchased with one monetary deposit is called | immediate annuity |
all of the statements regarding a tax-sheltered annuity (TSA) are true except | income derived from the TSA is received income tax free upon retirement payments received by employees from the accumulated savings is tax sheltered annuitites are treated as ordianary income |
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 | deferred |
T age 70 withdraws cash from a profit-sharing plan and purchases a straight life annuity. what will this transaction provide? | income that cannot be outlived by the owner |
which of these statements concerning an individual straight life annuity is accurate | payments are made to an annuitant for life |