#1
What is an annuity?
A series of equal periodic payments or receipts
ExplanationRegular payments or receipts made at fixed intervals.
#2
Which of the following is a characteristic of a fixed annuity?
Guaranteed periodic payments for a specified period
ExplanationFixed annuities offer secure payments over a set duration.
#3
What is a beneficiary in the context of annuities?
The person or entity who receives payments upon the annuitant's death
ExplanationIndividual or entity entitled to annuity payments upon the annuitant's demise.
#4
Which of the following statements about annuities and taxes is true?
All annuity withdrawals are taxed as ordinary income
ExplanationWithdrawals from annuities are treated as standard income tax.
#5
What is the surrender period in an annuity contract?
The period when the annuitant can cancel the annuity contract without penalties
ExplanationDuration during which annuitant can terminate the contract without incurring penalties.
#6
What is a joint and survivor annuity?
An annuity that pays benefits to the annuitant's spouse until their death
ExplanationAnnuity ensuring payments to the spouse until their demise.
#7
What is the key difference between a fixed annuity and a variable annuity?
Fixed annuities offer guaranteed returns, while variable annuities do not
ExplanationFixed annuities provide assured returns, whereas variable annuities lack such guarantees.
#8
What is the primary purpose of a death benefit rider in an annuity?
To provide income for the annuitant's beneficiaries in the event of the annuitant's death
ExplanationEnsures income for annuitant's beneficiaries upon annuitant's death.