Annuities 101

An annuity is most commonly used for:

• Saving for a short vacation

• Building an emergency fund

• Planning for retirement

• Speculative stock trading

What is the significance of annuity payments?

• They involve high-risk investments

• They can provide a guaranteed income stream

• They fluctuate based on market conditions

• They offer immediate cash payouts

Which of the following is NOT a type of annuity?

• Fixed annuity

• Variable annuity

• Mutual fund annuity

• Immediate annuity

What distinguishes an annuity from other financial products?

• Annuities have no tax benefits

• Annuities can provide lifetime payments

• Annuities have no contractual agreements

• Annuities have no fixed payment schedule

What is the primary goal of annuity payments?

• To maximize short-term gains

• To create a reliable income source

• To secure immediate cash withdrawals

• To speculate on market trends

Which type of annuity starts providing payments shortly after a lump-sum payment is made to the insurance company?

• Deferred Annuity

• Immediate Annuity

• Variable Annuity

• Joint and Survivor Annuity

Which annuity type offers payments based on the performance of a selected stock market index?

• Fixed Annuity

• Life Annuity

• Fixed Indexed Annuity

• Longevity Annuity

What distinguishes Qualified Annuities from Non-Qualified Annuities?

• Qualified Annuities are not subject to taxes.

• Non-Qualified Annuities are funded with pre-tax dollars.

• Qualified Annuities are purchased within tax-advantaged retirement accounts.

• Non-Qualified Annuities defer taxes until payments begin.

Which annuitization option provides payments for a specific number of years, regardless of whether the annuitant is alive?

• Joint and Survivor Annuity

• Period Certain Annuity

• Longevity Annuity

• Life Annuity

Is there ever a time you don't pay taxes on an annuity during the distribution phase?

• No

• Yes