#1
What is an annuity?
A series of periodic payments made at equal intervals
ExplanationAnnuity is a financial product that involves receiving a series of payments at regular intervals.
#2
Which of the following is a feature of a fixed annuity?
Guaranteed minimum interest rate
ExplanationFixed annuities provide a guaranteed minimum interest rate on invested funds.
#3
What is the surrender period in an annuity contract?
The period during which withdrawals are not allowed without penalty
ExplanationSurrender period is when withdrawals from an annuity incur penalties.
#4
Which type of annuity provides payments until the death of the annuitant?
Life annuity
ExplanationLife annuity ensures payments continue until the death of the annuity holder.
#5
What is the key characteristic of a deferred annuity?
Payments start after a certain period
ExplanationDeferred annuities involve delayed payment initiation, starting after a specified period.
#6
What is a rider in an annuity contract?
A provision that can be added to the contract for an additional cost
ExplanationA rider is an optional provision in an annuity contract available for an extra cost.
#7
What is the purpose of annuitization?
To convert the annuity's accumulated value into a stream of income
ExplanationAnnuitization transforms the accumulated value of an annuity into a steady income stream.
#8
What is a joint and survivor annuity?
An annuity that continues to pay as long as one annuitant is alive
ExplanationJoint and survivor annuity ensures payments continue as long as at least one annuitant is alive.
#9
What is a market value adjustment (MVA) in the context of annuities?
An adjustment to the annuity's surrender value based on changes in interest rates
ExplanationMVA is an adjustment to the surrender value of an annuity influenced by interest rate changes.