RMI 3011 Exam 3 FSU Question and
answers 100% correct
Annuity - correct answer ✔*Periodic payment that continues for a fixed
period or the rest of a designated life(s)
*An Annuity is: - correct answer ✔The opposite of life insurance
Annuitant - correct answer ✔The person who receives the payments
Major Types of Annuities (3) - correct answer ✔1. Fixed Annuity
2. Variable Annuity
3. Equity-Indexed Annuity
Fixed Annuity - correct answer ✔Pays periodic income payments that are
both guaranteed and fixed in amt. Little or no protection from inflation.
*Accumulation Period - correct answer ✔Period before retirement, in which
premiums gain interest
Guaranteed Rate - correct answer ✔Minimum interest rate that will be given
to a fixed annuity
Current Rate - correct answer ✔Based on current market conditions,
guaranteed for limited period
Liquidation Period - correct answer ✔Period that funds are paid out, or
annuitized
,*The Downside of a Fixed Annuity is: - correct answer ✔Little or no
protection against inflation
Immediate Annuity - correct answer ✔One where the first payment is due
one payment interval from the date of purchase
Deferred Annuity - correct answer ✔Provides income payments at some
future date
Single-Premium Deferred Annuity - correct answer ✔Deferred annuity
purchase with a lump sum
Flexible-Premium Annuity - correct answer ✔Allows the owner to vary the
premium payments
Most Annuities are Not: - correct answer ✔Annuitized
Under the Cash Option: - correct answer ✔Funds can be withdrawn in a
lump sum or in installments
Life Annuity (No Refund) Option - correct answer ✔Provides a life income to
the annuitant only while the annuitant remains alive
Life Annuity with Guaranteed Payments - correct answer ✔Pays a life
income to the annuitant with a certain number of guaranteed payments
,Installment Refund Option - correct answer ✔Pays a life income to the
annuitant; after the annuitant's death, payments continue to a beneficiary until
they equal the purchase price
Cash Refund Option - correct answer ✔Is similar to the Installment Refund
Option, but pays the beneficiary a lump sum
Joint-and-Survivor Annuity - correct answer ✔Pays benefits based on the
lives of two or more annuitants
Inflation-Indexed Annuity Option - correct answer ✔Provides periodic
payments that are adjusted for inflation
Variable Annuity - correct answer ✔Pays a lifetime income, but the income
payments vary depending on common stock prices
Accumulation Units - correct answer ✔Premiums are used to purchase these
during period prior to retirement
Annuity Units - correct answer ✔At retirement, the accumulation units are
converted into these
An Annuity Unit is: - correct answer ✔An accumulation unit, a sub-account of
the retiree's total accumulated annuity which represent a fixed share of
ownership of the insurer's accounts portfolio
*Longevity Insurance - correct answer ✔A low-cost annuity because there
are no cash values or death benefits in the policy
, Exclusion Ratio - correct answer ✔Investment in the contract / expected
return
IRA - correct answer ✔Individual retirement account
*Traditional IRA - correct answer ✔Allows workers to take a tax deduction for
part or all of their IRA contributions
Nondeductible IRA - correct answer ✔Taxpayers with incomes that exceed
the phase-out limits can contribute to this
Spousal IRA - correct answer ✔Allows a spouse who is not in the paid labor
force, or a low-earning spouse to make a fully deductible contribution to a
traditional IRA
*IRA Rollover - correct answer ✔Tax-free distribution of cash or other
property from one retirement plan, which is deposited into another retirement
plan
Roth IRA - correct answer ✔Another type of IRA that provides substantial tax
advantages
Fixed Annuities include: - correct answer ✔1. Accumulation Period
2. Guaranteed Rate
3. Current Rate
4. Liquidation Period
Time periods Fixed Annuities could be paid include: - correct answer ✔1.
Immediate Annuity
answers 100% correct
Annuity - correct answer ✔*Periodic payment that continues for a fixed
period or the rest of a designated life(s)
*An Annuity is: - correct answer ✔The opposite of life insurance
Annuitant - correct answer ✔The person who receives the payments
Major Types of Annuities (3) - correct answer ✔1. Fixed Annuity
2. Variable Annuity
3. Equity-Indexed Annuity
Fixed Annuity - correct answer ✔Pays periodic income payments that are
both guaranteed and fixed in amt. Little or no protection from inflation.
*Accumulation Period - correct answer ✔Period before retirement, in which
premiums gain interest
Guaranteed Rate - correct answer ✔Minimum interest rate that will be given
to a fixed annuity
Current Rate - correct answer ✔Based on current market conditions,
guaranteed for limited period
Liquidation Period - correct answer ✔Period that funds are paid out, or
annuitized
,*The Downside of a Fixed Annuity is: - correct answer ✔Little or no
protection against inflation
Immediate Annuity - correct answer ✔One where the first payment is due
one payment interval from the date of purchase
Deferred Annuity - correct answer ✔Provides income payments at some
future date
Single-Premium Deferred Annuity - correct answer ✔Deferred annuity
purchase with a lump sum
Flexible-Premium Annuity - correct answer ✔Allows the owner to vary the
premium payments
Most Annuities are Not: - correct answer ✔Annuitized
Under the Cash Option: - correct answer ✔Funds can be withdrawn in a
lump sum or in installments
Life Annuity (No Refund) Option - correct answer ✔Provides a life income to
the annuitant only while the annuitant remains alive
Life Annuity with Guaranteed Payments - correct answer ✔Pays a life
income to the annuitant with a certain number of guaranteed payments
,Installment Refund Option - correct answer ✔Pays a life income to the
annuitant; after the annuitant's death, payments continue to a beneficiary until
they equal the purchase price
Cash Refund Option - correct answer ✔Is similar to the Installment Refund
Option, but pays the beneficiary a lump sum
Joint-and-Survivor Annuity - correct answer ✔Pays benefits based on the
lives of two or more annuitants
Inflation-Indexed Annuity Option - correct answer ✔Provides periodic
payments that are adjusted for inflation
Variable Annuity - correct answer ✔Pays a lifetime income, but the income
payments vary depending on common stock prices
Accumulation Units - correct answer ✔Premiums are used to purchase these
during period prior to retirement
Annuity Units - correct answer ✔At retirement, the accumulation units are
converted into these
An Annuity Unit is: - correct answer ✔An accumulation unit, a sub-account of
the retiree's total accumulated annuity which represent a fixed share of
ownership of the insurer's accounts portfolio
*Longevity Insurance - correct answer ✔A low-cost annuity because there
are no cash values or death benefits in the policy
, Exclusion Ratio - correct answer ✔Investment in the contract / expected
return
IRA - correct answer ✔Individual retirement account
*Traditional IRA - correct answer ✔Allows workers to take a tax deduction for
part or all of their IRA contributions
Nondeductible IRA - correct answer ✔Taxpayers with incomes that exceed
the phase-out limits can contribute to this
Spousal IRA - correct answer ✔Allows a spouse who is not in the paid labor
force, or a low-earning spouse to make a fully deductible contribution to a
traditional IRA
*IRA Rollover - correct answer ✔Tax-free distribution of cash or other
property from one retirement plan, which is deposited into another retirement
plan
Roth IRA - correct answer ✔Another type of IRA that provides substantial tax
advantages
Fixed Annuities include: - correct answer ✔1. Accumulation Period
2. Guaranteed Rate
3. Current Rate
4. Liquidation Period
Time periods Fixed Annuities could be paid include: - correct answer ✔1.
Immediate Annuity
