Annuity Agent Training Exam Questions And Answers.
Chapter 1 Review Questions -
1. Which of the following influenced insurers to introduce variable annuities?
I. the post-war economic boom
II. consumers' experience with mutual funds
III. consumer demand
a. I and II only
b. I and III only
c. II and III only
d. I, II, and III - 1. d.
d. I, II, and III
I. the post-war economic boom
II. consumers' experience with mutual funds
III. consumer demand
2. As initially conceived, an annuity was:
I. a product designed to systematically liquidate a principal sum
II. a product with which to accumulate sums of money
a. I only
b. II only
c. both I and II
d. neither I nor II - 2. a.
a. I only
I. a product designed to systematically liquidate a principal sum
3. Which of the following did not contribute to insurers' Depression-era financial problems
stemming from the sale of annuities?
a. medical advances in the eradication of dread diseases
b. high inflation levels
c. improvement in medical treatment and facilities
d. low interest rates - 3. b.
b. high inflation levels
Chapter 2 Review Questions -
1. Audrey allocated her variable annuity premium to an aggressive stock variable
subaccount. Now
that she has reached age 55, she feels that she should assume a more conservative
investment
allocation and has decided to transfer the funds in the stock subaccount to the bond
subaccount. If
, Audrey is in a 25 percent tax bracket and her account has $100,000 of unrecognized gain,
what
will be Audrey's income tax liability resulting from her reallocation?
a. $0
b. $2,500
c. $25,000
d. $27,500 - 1. a.
a. $0
2. The principal advantage of a life annuity is in its providing an income that cannot be
outlived.
a. True
b. False - 2. a.
a. True
Chapter 3 Review Questions -
1. Which of the following is not an available annuity product?
a. a flexible premium deferred annuity
b. a flexible premium immediate annuity
c. a single premium deferred annuity
d. a single premium immediate annuity - 1. b.
b. a flexible premium immediate annuity
2. What is the minimum interest rate that is normally guaranteed when a contract owner
allocates his or her premiums to the variable subaccounts in a variable annuity?
a. 2.5 percent
b. 3 percent
c. 4 percent
d. There is no guaranteed minimum interest rate for funds allocated to a variable annuity's
variable subaccount. - 2. d.
d. There is no guaranteed minimum interest rate for funds allocated to a variable annuity's
variable subaccount.
3. An immediate annuity is defined as an annuity contract in which the first periodic
payment is made:
a. within five years
b. within two years
c. one income payment interval after purchase
d. monthly - 3. c.
c. one income payment interval after purchase
4. What is the interest to be credited in an indexed annuity based on?
I. an interest index
II. an equity index
Chapter 1 Review Questions -
1. Which of the following influenced insurers to introduce variable annuities?
I. the post-war economic boom
II. consumers' experience with mutual funds
III. consumer demand
a. I and II only
b. I and III only
c. II and III only
d. I, II, and III - 1. d.
d. I, II, and III
I. the post-war economic boom
II. consumers' experience with mutual funds
III. consumer demand
2. As initially conceived, an annuity was:
I. a product designed to systematically liquidate a principal sum
II. a product with which to accumulate sums of money
a. I only
b. II only
c. both I and II
d. neither I nor II - 2. a.
a. I only
I. a product designed to systematically liquidate a principal sum
3. Which of the following did not contribute to insurers' Depression-era financial problems
stemming from the sale of annuities?
a. medical advances in the eradication of dread diseases
b. high inflation levels
c. improvement in medical treatment and facilities
d. low interest rates - 3. b.
b. high inflation levels
Chapter 2 Review Questions -
1. Audrey allocated her variable annuity premium to an aggressive stock variable
subaccount. Now
that she has reached age 55, she feels that she should assume a more conservative
investment
allocation and has decided to transfer the funds in the stock subaccount to the bond
subaccount. If
, Audrey is in a 25 percent tax bracket and her account has $100,000 of unrecognized gain,
what
will be Audrey's income tax liability resulting from her reallocation?
a. $0
b. $2,500
c. $25,000
d. $27,500 - 1. a.
a. $0
2. The principal advantage of a life annuity is in its providing an income that cannot be
outlived.
a. True
b. False - 2. a.
a. True
Chapter 3 Review Questions -
1. Which of the following is not an available annuity product?
a. a flexible premium deferred annuity
b. a flexible premium immediate annuity
c. a single premium deferred annuity
d. a single premium immediate annuity - 1. b.
b. a flexible premium immediate annuity
2. What is the minimum interest rate that is normally guaranteed when a contract owner
allocates his or her premiums to the variable subaccounts in a variable annuity?
a. 2.5 percent
b. 3 percent
c. 4 percent
d. There is no guaranteed minimum interest rate for funds allocated to a variable annuity's
variable subaccount. - 2. d.
d. There is no guaranteed minimum interest rate for funds allocated to a variable annuity's
variable subaccount.
3. An immediate annuity is defined as an annuity contract in which the first periodic
payment is made:
a. within five years
b. within two years
c. one income payment interval after purchase
d. monthly - 3. c.
c. one income payment interval after purchase
4. What is the interest to be credited in an indexed annuity based on?
I. an interest index
II. an equity index
