WebCE Annuity Exam Questions with Correct Answers A+ Rated

Annuitization is Correct Answer Accumulated values are converted into a stream of periodic income payments. How often can payments of annuities be paid out? Correct Answer A specified term of years, for life, or a combination of the two. What is the reason (how has a consumer's priorities and needs shifted) that annuities are well suited for late-life retirement planning? Correct Answer When a consumer priorities and needs typically shift from asset accumulation to income distribution What is the start date range for deferred income annuities? Correct Answer Anywhere from 13 months to 40 years in the future. What is the age that Deferred Income Annuities' income start date cannot extend past? Correct Answer 85 years old. What are Surrender Charges? Correct Answer Fees the insurer assess for early withdrawals or contract surrenders. What is a Withdrawal Fee? Correct Answer when less than the full contract value is taken. What are the two approaches for insurers to determine the surrender charge? What are other ways? Correct Answer 1) Account Value Method 2) Premium Deposit Method 3) Market Value Adjustments 4) Premium Tax What is the Premium Deposit Method of determining the surrender charge? Correct Answer The charge on the amount of the contract's invested premium, applying a percentage that usually declines annually over the surrender charge period. What is the Account Value Method of determining the surrender charge? Correct Answer Assess a surrender charge equal to some percentage of the contract's accumulated value. What is Premium Tax in relation to the annuity? Correct Answer A number of states impose a tax on annuity premiums. What does the Mortality and Expense (M&E) charge? Correct Answer Assessed against the values of the separate subaccounts and is deducted before accumulation unit values are calculated. It helps ensure that the insurer can meet its contractual obligations for annualized income payments and a minimum death benefit.