Annuities Flashcards

What type of annuity did N purchase?

With a Straight Life Annuity, the insurer has to make further payments after the annuitant dies.

What is a characteristic of a variable annuity?

How does an indexed annuity differ from a fixed annuity?

What does an immediate annuity consist of?

Which of the following is NOT included in an annuity contract?

Which type of contract liquidates an estate through recurrent payments?

What type of annuity can be purchased with one monetary deposit?

What type of annuity is best suited for S who recently received a $500,000 lump sum retirement buyout?

What type of annuity promises continued payments to a beneficiary if the annuitant dies before receiving payments equal to the contract value?

Payments from an Individual Straight Life annuity are made to an annuitant for life.

What will T purchase with his withdrawal from the profit-sharing plan?

What type of annuity did P purchase by funding it with $500/month for 15 years?

What is an element of a Single Premium annuity?

Which annuity choice is NOT acceptable for W who wants to provide income for life starting at age 60?

What type of annuity did P NOT buy if he wants a lifetime income stream starting at age sixty?

Annuities Overview

Fixed Deferred annuity provides guaranteed payments starting at a future date.
Straight Life Annuity ends insurer payments after the annuitant's death, ensuring no further distributions.
Variable annuities include underlying equity investments, differentiating them from fixed annuities.

Types of Annuities

Indexed annuities link credited interest to the fluctuations of a selected index.
Immediate annuities require a single premium and begin payments shortly after purchase.
Single Premium Immediate Annuities guarantee lifetime income from a lump sum payment, starting within the first year.

Beneficiary and Payment Structures

Installment Refund annuities ensure payments continue to a beneficiary if the annuitant dies before receiving total contracted payments.
Straight Life annuities provide income for the annuitant's lifetime, unaffected by the duration of received payments.

Characteristics and Elements

An annuity can liquidate an estate through periodic payments.
Single Premium annuities rely on a lump-sum payment at the outset.
Deferred annuities involve funding over a period before income begins.

Considerations in Annuity Selection

Immediate annuities are unsuitable for individuals looking to start income at a future age.
Annuities can include a free-look period and nonforfeiture benefits as key contract features, but they do not include an AD&D rider.
A contract that guarantees payments for a specified period after the annuitant’s death reflects consumer protection in annuity design.

Study the basics of annuities with these flashcards. This quiz covers key terms and definitions related to different types of annuities, such as Fixed Deferred and Straight Life Annuities. Perfect for anyone looking to enhance their understanding of financial products.