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Social Science
Economics
Finance
Annuities
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Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's
surrender charge
death benefit
cash refund
income period
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income period
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Terms in this set (27)
Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's
surrender charge
death benefit
cash refund
income period
income period
How do interest earnings accumulate in a deferred annuity?
On a tax credit basis
On a tax-deferred basis
On a tax-free basis
On a taxable basis
On a tax-deferred basis
Under a non-qualified annuity, interest is taxed after the
deposits have been made
death of the annuitant
distribution of payments
exclusion ratio has been calculated
exclusion ratio has been calculated
(The taxable and non-taxable portions of annuity payments are determined by the exclusion ratio.)
Who assumes the investment risk with a fixed annuity contract?
The owner
The annuitant
The insurer
The beneficiary
The insurer
(It is the insurance company that bears the investment risk of a fixed annuity. The insurance company guarantees the annuitant's principal as well as a guaranteed minimum rate of return, even if the underlying assets underperform the guaranteed rate.)
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Fixed period
Interest only
Installment refund
Life income
Life income
