Questions and Answers
What is the index term in an indexed annuity?
The period of time over which index interest is calculated.
Which one of the following fees normally is NOT found in fixed annuities?
What is the traditional death benefit normally payable in a declared-rate fixed annuity if the contract owner dies before the annuity starting date?
The benefit is equal to the greater of the net premiums paid or the cash value.
Which of the following is considered a temporary annuity?
Signup and view all the answers
An insurer's variable subaccounts can be differentiated by all of the following EXCEPT:
Signup and view all the answers
What is normally the biggest disadvantage to investing in annuities?
Signup and view all the answers
Why is the age of a consumer an important factor when recommending an annuity?
Signup and view all the answers
By what amount would Shirley's death benefit be enhanced under the rider?
Signup and view all the answers
Which of the following is NOT an administrative penalty that can be imposed on an agent for violation of the California Insurance Code Article 6.3 concerning seniors?
Signup and view all the answers
What is the maximum term of imprisonment for an agent who makes a misrepresentation to induce another person to buy an annuity contract?
Signup and view all the answers
Why must the agent determine the extent of the senior's liquid assets before recommending an annuity?
Signup and view all the answers
Study Notes
Indexed Annuities
- The index term in an indexed annuity refers to the time frame used to calculate index interest.
Fixed Annuities
- Premium taxes are typically not associated with fixed annuities.
Death Benefits
- In a declared-rate fixed annuity, the traditional death benefit if the contract owner dies before the annuity starting date is the higher of net premiums paid or the cash value.
Types of Annuities
- A fixed amount annuity is classified as a temporary annuity.
Variable Subaccounts
- Insurer's variable subaccounts can be distinguished by factors, including interest guarantees, but not by the underlying portfolio.
Investment Disadvantages
- The principal disadvantage of investing in annuities is their poor tax treatment.
Consumer Age Consideration
- Annuity recommendations must take into account a consumer's age due to surrender charges on deferred annuities that may restrict elderly owners from accessing income without penalties.
Enhanced Death Benefit Rider
- Shirley's annuity featured an enhanced death benefit rider, providing a 40% gain increase on her death benefit, resulting in an additional $20,000 given a gained value during her contract accumulation.
Administrative Penalties in California
- Agents violating the California Insurance Code regarding seniors face various administrative penalties, excluding imprisonment for up to six months.
Misrepresentation Penalty
- The maximum imprisonment term for an agent making misrepresentations to sell annuity contracts is 12 months.
Assessing Senior Assets
- Agents must evaluate a senior’s liquid assets to assure adequate inheritance for heirs upon the senior's death.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on annuities with these flashcards covering key terms and definitions. Explore topics such as index terms, fees in fixed annuities, and traditional death benefits. Perfect for students and professionals looking to reinforce their understanding of annuity concepts.
