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Questions and Answers
What is a reversionary annuity primarily designed to provide?
In a reversionary annuity, who typically receives the payments after the initial annuitant passes away?
Which of the following best describes the financial benefit of a reversionary annuity?
What risk does a reversionary annuity help mitigate for the annuitant?
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What is often a characteristic feature of a reversionary annuity?
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Study Notes
Reversionary Annuities
- A reversionary annuity is designed to provide a stream of income payments to a beneficiary after the death of the primary annuitant.
- In a reversionary annuity, the payments typically go to the surviving spouse or another designated beneficiary.
- The financial benefit of a reversionary annuity is that it provides income to the beneficiary after the death of the primary annuitant.
- Reversionary annuities help mitigate the risk of the primary annuitant outliving their savings.
- A common feature of reversionary annuities is the requirement of a second life, meaning the payments depend on the life expectancy of both the primary annuitant and the beneficiary.
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Description
Test your knowledge on reversionary annuities with this quiz. Explore key concepts such as payment beneficiaries, financial benefits, and risk mitigation associated with reversionary annuities. Perfect for finance students and those interested in retirement planning.
