Primerica Life Insurance Chapter 5: Annuities |Question and Answer| 100% Correct

Primerica Life Insurance Chapter 5: Annuities |Question and Answer| 100% Correct Deferred *Ans* Withheld or postponed until a specified time or event in the future IRS *Ans* Internal Revenue Service: Responsible for tax collection and tax enforcement Life Contingency *Ans* Depended on whether or not the insured is alive Liquidation of an estate *Ans* converting a person's net worth into a cash flow Qualified Plan *Ans* A retirement plan that meets the IRS guidelines for receiving favorable tax treatment Suitability *Ans* A requirement to determine if an insurance product or investment is appropriate for a particular customer What is life insurance purchased for and what are annuities purchased for *Ans* Risk of dying to soon, Risk of living too long What is the difference between the mortality tables used for life insurance and annuities *Ans* The annuity table has a greater life expectancy that the table for the life insurance What is an annuity *Ans* To accumulate money in order to liquidate an estate Who are the parties of an annuity *Ans* The owner is the purchaser The annuitant is the person who received that payments from the annuity, whose life expectancy is taken into consideration, and for whom the annuity is written The Beneficiary is the person who receives the annuity asses in case of the annuitant dying What is the accumulation period *Ans* This is the pay in period and is the period of time over which the owner makes payments into an annuity. These payments earn interest on a tax-deferred basis What is the annuity period *Ans* The annuitization, liquidation, or payout period is the time which the total annuity value is converted into a stream of income payments to the annuitant What 4 things is the annuity income amount based on? *Ans* The cash value accumulate