Michigan Variable Annuities Exam
with Correct Answers 100% Pass
Other names for pure life settlement - CORRECT ANSWER--life income
-life annuity
What annuity settlement option produces the largest monthly income guaranteed
for life? - CORRECT ANSWER-pure life settlement option
second life contingency option - CORRECT ANSWER-life with period certain (ie.
10 years) so even if the annuitant does or does not die within that timeframe,
insurer guarantees to continue the annuity payments to a named beneficiary for the
balance of the certain period.
third life contingency option - CORRECT ANSWER-life with refund; insurer
guarantees payments for life, but if the annuitant dies before the payments received
equal the annuitant's basis (the total amount paid for the annuity), then the insurer
agrees to pay out the remaining basis to a named beneficiary
which annuity settlement option provides the largest monthly income payment?
a. life with period certain
,b. pure life option
c. life with refund - CORRECT ANSWER-b
how long is the free-look period for Michigan annuity contracts - CORRECT
ANSWER-10 calendar days after purchase date (eligible for full refund including
premium paid)
accumulation period/units - CORRECT ANSWER-a $5,000 prem deposit in a VA
in which the units are valued at $5, would purchase 1,000 accumulation units. New
prem pmts change the number of accumulation units in a purchaser's account, and
market fluctuations change each unit's value, so remember that both the number
and value of accumulation units change
annuity period/units - CORRECT ANSWER-when annuitized, accumulation units
are converted to a set number of annuity units; this number becomes one of the
factors used to calculate the payout each month during the annuity phase (once the
# of annuity units is chosen, it will not change, but the value of each unit change)
Assumed Interest Rate (AIR) - CORRECT ANSWER-arbitrary rate of return set
by the insurer for any separate account they establish; VA owner ust experience a
separate account net investment rate of return that exceeds the AIR in order for
those product values to go up
Applying AIR to variable life - CORRECT ANSWER-applies to the variable death
benefit, but not var. cash value (only a separate account return above the AIR
would increase the variable policy death benefit)
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, Applying AIR to variable annuity - CORRECT ANSWER-applies to the variable
annuity unit value and any payouts, but not o the variable accumulation value (only
a separate account return above the AIR would increase the variable annuity unit
values and pmts)
Combination Annuities - CORRECT ANSWER-Combo offers features of fixed
and variable contracts
-Fixed portion offers guaranteed rate
-Variable portion tries to achieve higher rate of return
-$ in fixed portion goes to general account for conservative investment
-$ in variable portion goes to separate account for stocks, bond, mutual funds
-Reps must have securities and insurance licenses
Guaranteed living benefits (GLB) - CORRECT ANSWER-Accumulation, income,
and withdrawal guarantee features of annuities; attractive to older and conservative
consumers
guaranteed minimum account value (GMAV) - CORRECT ANSWER-variable
annuity guaranteed life benefit that ensures the contract's account value will be the
greater of the premiums paid or the actual account value after a specified period of
time, such as 8 or 10 years
with Correct Answers 100% Pass
Other names for pure life settlement - CORRECT ANSWER--life income
-life annuity
What annuity settlement option produces the largest monthly income guaranteed
for life? - CORRECT ANSWER-pure life settlement option
second life contingency option - CORRECT ANSWER-life with period certain (ie.
10 years) so even if the annuitant does or does not die within that timeframe,
insurer guarantees to continue the annuity payments to a named beneficiary for the
balance of the certain period.
third life contingency option - CORRECT ANSWER-life with refund; insurer
guarantees payments for life, but if the annuitant dies before the payments received
equal the annuitant's basis (the total amount paid for the annuity), then the insurer
agrees to pay out the remaining basis to a named beneficiary
which annuity settlement option provides the largest monthly income payment?
a. life with period certain
,b. pure life option
c. life with refund - CORRECT ANSWER-b
how long is the free-look period for Michigan annuity contracts - CORRECT
ANSWER-10 calendar days after purchase date (eligible for full refund including
premium paid)
accumulation period/units - CORRECT ANSWER-a $5,000 prem deposit in a VA
in which the units are valued at $5, would purchase 1,000 accumulation units. New
prem pmts change the number of accumulation units in a purchaser's account, and
market fluctuations change each unit's value, so remember that both the number
and value of accumulation units change
annuity period/units - CORRECT ANSWER-when annuitized, accumulation units
are converted to a set number of annuity units; this number becomes one of the
factors used to calculate the payout each month during the annuity phase (once the
# of annuity units is chosen, it will not change, but the value of each unit change)
Assumed Interest Rate (AIR) - CORRECT ANSWER-arbitrary rate of return set
by the insurer for any separate account they establish; VA owner ust experience a
separate account net investment rate of return that exceeds the AIR in order for
those product values to go up
Applying AIR to variable life - CORRECT ANSWER-applies to the variable death
benefit, but not var. cash value (only a separate account return above the AIR
would increase the variable policy death benefit)
COPYRIGHT ALL RIGHTS RESERVED ©️ 2025
, Applying AIR to variable annuity - CORRECT ANSWER-applies to the variable
annuity unit value and any payouts, but not o the variable accumulation value (only
a separate account return above the AIR would increase the variable annuity unit
values and pmts)
Combination Annuities - CORRECT ANSWER-Combo offers features of fixed
and variable contracts
-Fixed portion offers guaranteed rate
-Variable portion tries to achieve higher rate of return
-$ in fixed portion goes to general account for conservative investment
-$ in variable portion goes to separate account for stocks, bond, mutual funds
-Reps must have securities and insurance licenses
Guaranteed living benefits (GLB) - CORRECT ANSWER-Accumulation, income,
and withdrawal guarantee features of annuities; attractive to older and conservative
consumers
guaranteed minimum account value (GMAV) - CORRECT ANSWER-variable
annuity guaranteed life benefit that ensures the contract's account value will be the
greater of the premiums paid or the actual account value after a specified period of
time, such as 8 or 10 years
