XCEL CH.7 EXAM 2025 QUESTIONS AND
ANSWERS
Andy the annuitant dies before the annuity start date. Which of the following is a TRUE
statement? - ANS Premiums paid plus interest earned is returned to the beneficiary
How soon can the benefit payments begin with a deferred annuity? - ANS A minimum of 12
months after date of purchase
When does an immediate annuity begin making payments? - ANS After the first premium has
been paid
How are annuities given favorable tax treatment? - ANS Gains are taxed at distribution
Which settlement option pays a stated amount to an annuitant, but no residual value to a
beneficiary? - ANS Life income
1 @COPYRIGHT THEBRIGHT 2025/2026
, What is the nonforfeiture value of an annuity before annuitization? - ANS All premiums paid,
plus interest, minus any withdrawals and surrender charges
An annuity is primarily used to provide - ANS retirement income
An annuitant is guaranteed to NOT outlive their benefits with a(n) - ANS Guaranteed lifetime
withdrawal benefit
An immediate annuity has been purchased with a single premium. When does the annuitant
typically begin receiving benefit payments? - ANS 1 month
How do interest earnings accumulate in a deferred annuity? - ANS On a tax-deferred basis
What will the beneficiary receive if an annuitant dies during the accumulation period? -
ANS The greater of the accumulated cash value or the total premium paid
What is the primary reason for buying an annuity? - ANS Provide future economic security
2 @COPYRIGHT THEBRIGHT 2025/2026
ANSWERS
Andy the annuitant dies before the annuity start date. Which of the following is a TRUE
statement? - ANS Premiums paid plus interest earned is returned to the beneficiary
How soon can the benefit payments begin with a deferred annuity? - ANS A minimum of 12
months after date of purchase
When does an immediate annuity begin making payments? - ANS After the first premium has
been paid
How are annuities given favorable tax treatment? - ANS Gains are taxed at distribution
Which settlement option pays a stated amount to an annuitant, but no residual value to a
beneficiary? - ANS Life income
1 @COPYRIGHT THEBRIGHT 2025/2026
, What is the nonforfeiture value of an annuity before annuitization? - ANS All premiums paid,
plus interest, minus any withdrawals and surrender charges
An annuity is primarily used to provide - ANS retirement income
An annuitant is guaranteed to NOT outlive their benefits with a(n) - ANS Guaranteed lifetime
withdrawal benefit
An immediate annuity has been purchased with a single premium. When does the annuitant
typically begin receiving benefit payments? - ANS 1 month
How do interest earnings accumulate in a deferred annuity? - ANS On a tax-deferred basis
What will the beneficiary receive if an annuitant dies during the accumulation period? -
ANS The greater of the accumulated cash value or the total premium paid
What is the primary reason for buying an annuity? - ANS Provide future economic security
2 @COPYRIGHT THEBRIGHT 2025/2026
