Arizona Life Insurance Exam -
Annuities
Deferred - answer Withheld or postponed until a specified time or event in the future
IRS - answer Internal Revenue Service, the U.S. government agency responsible for
collecting taxes and enforcement of the Internal Revenue Code
Life Contingency - answer Dependent on whether or not the insured is alive
Liquidation of an Estate - answer Converting a person's net worth into a cash flow
Natural Person - answer A human being
Qualified Plan - answer A retirement plan that meets the IRS guidelines for receiving a
favorable tax treatment
Suitability - answer A requirement to determine if an insurance product or an investment
is appropriate for a particular customer
Owner - answer The _____ of the annuity has all the rights, such as naming the
beneficiary and surrendering the annuity
Annuitant - answerThe person who receives the benefits or payments from the annuity,
whose life expectancy is taken into consideration, and for whom the annuity is written
Beneficiary - answerThe person who receives annuity assets (either the amount paid
into the annuity or the cash value, whichever is greater) if the annuitant dies during the
accumulation period
Accumulation Period - answer(AKA the pay-in period) The period of time over which the
owner makes payments (premiums) into an annuity
Annuity Period - answer(AKA the annuitization period, liquidation period, or pay-out
period) The time during which the sum that has been accumulated during the
accumulation period is converted into a stream of income payments to the annuitant
Single Premium - answerOne-time lump-sum payment for annuity
Periodic Payments - answerPremiums are paid in installments over a period of time
Level Premium - answerThe premium is a fixed installment
Annuities
Deferred - answer Withheld or postponed until a specified time or event in the future
IRS - answer Internal Revenue Service, the U.S. government agency responsible for
collecting taxes and enforcement of the Internal Revenue Code
Life Contingency - answer Dependent on whether or not the insured is alive
Liquidation of an Estate - answer Converting a person's net worth into a cash flow
Natural Person - answer A human being
Qualified Plan - answer A retirement plan that meets the IRS guidelines for receiving a
favorable tax treatment
Suitability - answer A requirement to determine if an insurance product or an investment
is appropriate for a particular customer
Owner - answer The _____ of the annuity has all the rights, such as naming the
beneficiary and surrendering the annuity
Annuitant - answerThe person who receives the benefits or payments from the annuity,
whose life expectancy is taken into consideration, and for whom the annuity is written
Beneficiary - answerThe person who receives annuity assets (either the amount paid
into the annuity or the cash value, whichever is greater) if the annuitant dies during the
accumulation period
Accumulation Period - answer(AKA the pay-in period) The period of time over which the
owner makes payments (premiums) into an annuity
Annuity Period - answer(AKA the annuitization period, liquidation period, or pay-out
period) The time during which the sum that has been accumulated during the
accumulation period is converted into a stream of income payments to the annuitant
Single Premium - answerOne-time lump-sum payment for annuity
Periodic Payments - answerPremiums are paid in installments over a period of time
Level Premium - answerThe premium is a fixed installment
