A type of investment only available to corporations
An annual financial report
#2
Which of the following is NOT a characteristic of an annuity?
Regular periodic payments
Fixed interest rate
Fixed duration
Lump sum payment
#3
What is a fixed annuity?
An annuity where the payment amount varies
An annuity with a guaranteed interest rate
An annuity with no fixed duration
An annuity that pays only once
#4
What distinguishes an immediate annuity from a deferred annuity?
Immediate annuities have higher interest rates
Immediate annuities start payments soon after purchase, while deferred annuities start payments at a later date
Deferred annuities are only available to seniors
Immediate annuities have longer durations
#5
What is the surrender period in relation to an annuity?
The period during which the annuity holder cannot withdraw funds without penalty
The period when the annuity pays out its maximum returns
The period during which the annuity earns compound interest
The period when the annuity holder can withdraw funds with no penalties
#6
Which type of annuity offers the potential for increasing payments over time to offset inflation?
Fixed annuity
Deferred annuity
Immediate annuity
Indexed annuity
#7
What is the main advantage of a lifetime annuity?
Flexibility in payment frequency
Ability to leave a lump sum to beneficiaries
Guaranteed income for life
Higher interest rates
#8
What is the primary purpose of an annuity's death benefit?
To provide a lump sum payment to the beneficiary upon the annuitant's death
To increase the annuity payments during the annuitant's lifetime
To terminate the annuity contract upon the annuitant's death
To waive all fees associated with the annuity upon the annuitant's death
#9
In a fixed-indexed annuity, the interest rate is tied to:
The performance of a specific stock
The performance of a stock market index
The Federal Reserve interest rate
The annuitant's age
#10
What is a variable annuity?
An annuity with a fixed interest rate
An annuity where the payment amount varies based on the performance of underlying investments
An annuity that can only be purchased by wealthy individuals
An annuity that pays out only once
#11
Which of the following is a potential risk associated with annuities?
Guaranteed income for life
Loss of purchasing power due to inflation
Flexibility in withdrawal options
No tax implications
#12
What is a Qualified Longevity Annuity Contract (QLAC)?
An annuity contract that only covers short-term needs
An annuity purchased with after-tax dollars
An annuity that begins payouts after a certain age, typically 70½ or older, used to defer required minimum distributions (RMDs) from retirement accounts
An annuity with no age restrictions
#13
What is a rider in the context of annuities?
A person who manages annuity contracts
A feature added to an annuity contract, often for an additional cost, to customize its terms
A type of annuity available only to bicycle riders
A document detailing the terms of an annuity contract
#14
Which of the following statements about variable annuities is true?
Variable annuities offer guaranteed returns
Variable annuities are not subject to market fluctuations
Variable annuities allow the annuitant to select and manage investments
Variable annuities have fixed payment amounts
#15
Which of the following factors determines the amount of annuity payments?
The age of the annuitant
The annuity's surrender period
The annuity's death benefit
The annuity's initial investment amount
#16
What is a market value-adjusted annuity (MVA)?
An annuity that adjusts its payments based on changes in market interest rates
An annuity that allows the annuitant to select and manage investments
An annuity that adjusts its payments based on the annuitant's age
An annuity that adjusts its surrender value based on changes in market interest rates