Types of Life Policies

What is an annuity?

• A contract to provide income for X amount of years

• A way to save money for the future

• An investment tool

• All of the above

Answer explanation

An annuity is a guaranteed stream of income. It can be used to replace lost of Income in retirement.

The accumulation period is followed by the Annuitization period

• True

• False

Answer explanation

The accumulation period is the period in which YOU the owner pays money or premiums into the the annuity for a set amount of time or limit as specified by you or the company. Once it has reached the set limit; payments into the annuity stops and the money is paid out in a series of payments as specified by the annuity contract.

All of the following statements are true regarding installments for a fixed amount EXCEPT

• This option pays a specific amount until the funds are exhausted

• The payment will stop when the annuity dies

• Value of the account and future earnings will determine the time period for benefits

Answer explanation

Installments for a fixed amount option has no life contingencies. A specific amount of benefits will be paid until funds are exhausted whether or not the annuitant dies

Which of the following is a feature of the variable annuity

• all of them

• Benefit payments amounts are not guaranteed

• Interest rate is guaranteed

• security license is not required

Which of the following is TRUE regarding variable annuities

• The annuitant assumes the risk on investment

• The funds are invested in the company's general account

• They are always half price

• Most people like them

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

• $100000000

• $100,000

• $200,000

• nothing

Answer explanation

In joint life policies, the death benefit is paid upon the first death only

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?

• A group policy

• An annuity

• Saving a lot

• a universal life policy

Answer explanation

a contract for distribution of funds over a specific period of time, periodic payments of accumulated funds.

Which of the following policies would be classified as a traditional level premium contract?

• Straight Life

• Real life

• Universal Life

• Adjustable Life

Answer explanation

Straight whole life policies have a level guaranteed face amount and a level premium for the life of the insured

All of the following entities regulate variable life policies EXCEPT

• The guaranty association

• The SEC

• Federal Government

Which of the following types of annuities will generally provide the highest income?

• CEO level Job

• Straight life

• joint and survivor

• installment refund