#1
What is an annuity?
A series of periodic payments made or received at regular intervals
ExplanationRegular payments made or received periodically.
#2
Which of the following is NOT a type of annuity?
Flexible annuity
ExplanationNot a type of annuity.
#3
What is the role of the annuitant in an annuity contract?
The person who receives the annuity payments
ExplanationRecipient of annuity payments.
#4
What happens to the funds remaining in an annuity upon the death of the annuitant?
The funds are distributed to the annuitant's beneficiaries
ExplanationDistribution to beneficiaries upon annuitant's death.
#5
Which entity typically issues annuities?
Insurance companies
ExplanationIssued by insurance companies.
#6
What is the primary characteristic of a fixed annuity?
Guaranteed minimum interest rate
ExplanationProvides a guaranteed minimum interest rate.
#7
In a variable annuity, how are the funds typically invested?
Invested in a diversified portfolio of stocks and bonds
ExplanationFunds invested in a mix of stocks and bonds.
#8
What is the key benefit of a deferred annuity?
Tax-deferred growth
ExplanationGrowth without immediate taxation.
#9
Which of the following is a characteristic of an immediate annuity?
Payments begin immediately
ExplanationImmediate start of annuity payments.
#10
What is the purpose of a rider in an annuity contract?
To add additional features or benefits to the annuity
ExplanationEnhancements or additional benefits.
#11
What is the surrender period in an annuity contract?
The period during which withdrawals are subject to penalties
ExplanationWithdrawal penalties during a specified period.
#12
What is the annuitization phase of an annuity?
The phase during which the annuity holder receives periodic payments
ExplanationPeriodic payment phase for the annuity holder.
#13
What is the purpose of a death benefit rider in an annuity contract?
To provide a lump sum payment to beneficiaries upon the annuitant's death
ExplanationLump sum payment to beneficiaries upon death.
#14
Which of the following is true about a qualified annuity?
Funds used to purchase the annuity are tax-deferred
ExplanationTax-deferred funds used for purchase.
#15
What is the purpose of the surrender charge in an annuity?
To discourage annuitants from withdrawing funds early
ExplanationDiscourages early fund withdrawal.