NC LIFE INSURANCE - ANNUITIES CHAPTER QUIZ
The president of a company is starting an annuity and decides that his corporation will
be the annuitant. Which of the following statements is true?
A. The contract can be issued without an annuitant
B. The annuitant must be a natural person
C. A corporation can be an annuitant as long as it is also the owner
D. A corporation can be an annuitant as long as the beneficiary is a natural person -
Answers - B. The annuitant must be a natural person
Owners of annuities can be individuals or entities like corporation and trusts, but the
annuitant must be a natural person whose life expectancy is taken into consideration for
the annuity
Which of the following is TRUE regarding the accumulation period of an annuity?
A. It is limited to 10 years
B. It is a period during which the payments into the annuity grow tax deferred
C. It is also referred to as the annuity period
D. It is a period of time during which the beneficiary receives income - Answers - B. It
is a period during which the payments into the annuity grow tax deferred
The "accumulation period" is the period of time over which the annuitant makes
payments (premiums) into an annuity. This is the period of time during which the
payments earn interest and grow tax deferred.
The annuity owner dies during the accumulation period with naming a beneficiary.
Annuity's cash value exceeds premiums paid. Which of the following is true?
A. The cash value will be paid to the state government
B. The cash value will be paid to the annuitant's estate
C. The premium value will be paid to the annuitant's estate
D. All benefits will be forfeited - Answers - B. The cash value will be paid to the
annuitant's estate
If an annuitant dies during the accumulation period, the beneficiary is paid either the
cash value of the policy or the amount of premiums paid, whichever is the larger
amount. In this case, a beneficiary is not named, so the cash value will be paid to the
annuitant's estate.
Which of the following is TRUE regarding the annuity period?
A. It may last for the lifetime of the annuitant
B. During this period of time the annuity payments grow interest tax deferred
C. It is also referred to as the accumulation period
, D. It is the period of time during which the annuitant makes premium payments into the
annuity - Answers - A. It may last for the lifetime of the annuitant
The "annuity period" is the time during which accumulated money is converted into an
income stream. It may last for the lifetime of the annuitant or for shorter specified period
of time depending on the benefit payment option selected.
All of the following statements are true regarding installments for a fixed amount
EXCEPT
A. the payments will stop when the annuitant dies
B. value of the account and future earnings will determine the time period for the
benefits
C. this option pays a specific amount until the options are exhausted
D. the annuitant will select how big the payments will be - Answers - A. the payments
will stop when the annuitant dies
Installments for a fixed amount option has no life contingencies. A specific amount of
benefits will be paid until funds are exhausted whether or not the annuitant is living
A couple receives a set amount of income from their annuity. When the wife dies, the
husband no longer receives annuity payments. What type of annuity did the couple
buy?
A) Life with period certain
B) Joint limited annuity
C) Joint life
D) Joint and survivor - Answers - C) Joint life
Joint life annuity settlement option pays benefits to two or more annuitants, but stops
upon the death of the first
Annuities can be used to fund which of the following?
A. Estate creation
B. Retirement plans
C. Variable life insurance
D. Group life insurance - Answers - B. Retirement plans
Since annuities are a popular means to provide retirement income, they are often used
to fund qualified retirement plans.
Which of the following is true regarding variable annuities?
A. The company guarantees a minimum interest rate
B. A person selling variable annuities is required to have only a life agent's license
The president of a company is starting an annuity and decides that his corporation will
be the annuitant. Which of the following statements is true?
A. The contract can be issued without an annuitant
B. The annuitant must be a natural person
C. A corporation can be an annuitant as long as it is also the owner
D. A corporation can be an annuitant as long as the beneficiary is a natural person -
Answers - B. The annuitant must be a natural person
Owners of annuities can be individuals or entities like corporation and trusts, but the
annuitant must be a natural person whose life expectancy is taken into consideration for
the annuity
Which of the following is TRUE regarding the accumulation period of an annuity?
A. It is limited to 10 years
B. It is a period during which the payments into the annuity grow tax deferred
C. It is also referred to as the annuity period
D. It is a period of time during which the beneficiary receives income - Answers - B. It
is a period during which the payments into the annuity grow tax deferred
The "accumulation period" is the period of time over which the annuitant makes
payments (premiums) into an annuity. This is the period of time during which the
payments earn interest and grow tax deferred.
The annuity owner dies during the accumulation period with naming a beneficiary.
Annuity's cash value exceeds premiums paid. Which of the following is true?
A. The cash value will be paid to the state government
B. The cash value will be paid to the annuitant's estate
C. The premium value will be paid to the annuitant's estate
D. All benefits will be forfeited - Answers - B. The cash value will be paid to the
annuitant's estate
If an annuitant dies during the accumulation period, the beneficiary is paid either the
cash value of the policy or the amount of premiums paid, whichever is the larger
amount. In this case, a beneficiary is not named, so the cash value will be paid to the
annuitant's estate.
Which of the following is TRUE regarding the annuity period?
A. It may last for the lifetime of the annuitant
B. During this period of time the annuity payments grow interest tax deferred
C. It is also referred to as the accumulation period
, D. It is the period of time during which the annuitant makes premium payments into the
annuity - Answers - A. It may last for the lifetime of the annuitant
The "annuity period" is the time during which accumulated money is converted into an
income stream. It may last for the lifetime of the annuitant or for shorter specified period
of time depending on the benefit payment option selected.
All of the following statements are true regarding installments for a fixed amount
EXCEPT
A. the payments will stop when the annuitant dies
B. value of the account and future earnings will determine the time period for the
benefits
C. this option pays a specific amount until the options are exhausted
D. the annuitant will select how big the payments will be - Answers - A. the payments
will stop when the annuitant dies
Installments for a fixed amount option has no life contingencies. A specific amount of
benefits will be paid until funds are exhausted whether or not the annuitant is living
A couple receives a set amount of income from their annuity. When the wife dies, the
husband no longer receives annuity payments. What type of annuity did the couple
buy?
A) Life with period certain
B) Joint limited annuity
C) Joint life
D) Joint and survivor - Answers - C) Joint life
Joint life annuity settlement option pays benefits to two or more annuitants, but stops
upon the death of the first
Annuities can be used to fund which of the following?
A. Estate creation
B. Retirement plans
C. Variable life insurance
D. Group life insurance - Answers - B. Retirement plans
Since annuities are a popular means to provide retirement income, they are often used
to fund qualified retirement plans.
Which of the following is true regarding variable annuities?
A. The company guarantees a minimum interest rate
B. A person selling variable annuities is required to have only a life agent's license
