Michigan Variable Exam Questions & Answers 100% Verified (Grade A+)
1. accumulation the period during which contributions are made to an annuity
phase
2. accumulation an accounting measure, similar to a mutual fund share, used to determine an
unit annuitant's proportionate interest in the insurer's separate account during the
accumulation phase of a variable annuity. Both the number an value of these units
will change during the accumulation phase
3. administration under an insurance or annuity contract, the charge the insurance company makes
charge to compensate for maintaining records, accounting and reports generation
4. annuitant a person who receives the distribution from an annuity contract
5. annuity a contract in which the insurer agrees, for a price, to make regular payments to
an individual for life or some fixed period
6. annuity phase the period, after annuitization, during which annuity payments are made to an
annuitant
7. annuity unit An accounting measure used to determine the amount of each payment during
an annuity's distribution stage. The calculation takes into account the value of each
accumulation unit and such other factors as assumed interest rate and mortality
risk.
8. assumed interest an assumption, built into variable annuity contracts, of the minimum rate of return
rate AIR the insurer expects to receive and that forms the basis for an initial annuity
payment as well as a "floor" from which to measure gain
9. combined ("bal- an annuity providing for payments that derive from both fixed and variable annuity
anced") annuity accounts
10. death benefit an amount equal to the higher of the separate account balance or the sum of the
guarantee (VA) purchase payments, which is paid to the beneficiary of a variable annuitant in the
event of their death during the accumulation phase
, Michigan Variable Exam Questions & Answers 100% Verified (Grade A+)
11. deferred annutiy an annuity in which payments begin more than one payment period (one month
to one year) after the purchase date
12. direct method an approach to managing a variable products separate account that utilizes an
open ended investment company (similar to a mutual fund family) created inside
the structure of an insurer
13. diversification an investing technique characterized by buying a variety of ditterent investments
the market risk is spread out and reduced
14. dual licensure the requirement that a person who sells variable life or variable annuities must
be state licensed to sell life insurance, and also federally licensed as a registered
representative of an NASD member to sell variable products
15. expense guaran- a guarantee made by an insurer that expenses for a variable product will not
tee exceed certain maximum levels
16. fixed amount op- an insurance or annuity settlement option in which a chosen amount is paid out
tion for an approximate length of time when principal and interest are exhausted
17. fixed annuity an annuity providing that the insurer will pay the annuitant a guaranteed, fixed
amount during the annuity phase
18. fixed period op- an insurance or annuity settlement option in which an approximate amount is
tion paid out fo ra chosen length of time when principal and interest are exhausted
19. flexible premium a deferred annuity purchased with a series of payments, which may be irregular
deferred annuity as to amount or timing
FPDA
20. flexible premium a type of life insurance, also known as variable universal life, which is characterized
variable life by flexible premiums, adjustable death benefit, and the ability of the owner to
make partial surrenders
, Michigan Variable Exam Questions & Answers 100% Verified (Grade A+)
21. general account the account that holds all o fthe assets of an insurer other than those in the
separate accounts. the general account holds the premiums for all fixed life and
annuity products and is typically conservatively invested in bonds and commercial
real estate to produce a relatively stable return
22. growth an investment objective that focuses on long-term capital appreciation rather than
immediate income
23. immediate annu- an annuity, purhcased with a single premium payment, in which annuity payments
ity begin the next period (one month to one year) after purchase
24. income an investemnt objective that focuses on dividends and interest to produce income
rather than capital appreciation
25. indirect method an approach to managing a variable products separate account that uses a unit
investment trust contract with an investment company external to the insurer
26. interest only op- an insurance or annuity settlement option in which the insurer holds the principal
tion and pays interest to the beneficiary with a guaranteed minimum rate
27. investment com- a federal statute requiring insurer separate accounts to be registered as invest-
pany act of 1940 ment companies with teh securities industry
28. investment man- with a variable life insurance or variable annuity contract, this is the amount paid to
agement fee an investment advisor for providing professional investment advice for an insurer
separate account
29. joint life income an insurance or annuity settlement option in which payments continue for a s long
as both of two annuitants are living
30. joint and survivor an insurance or annuity settlement option in which payments continue fora s long
life income as either fo the two annuitants are living
31. life income
1. accumulation the period during which contributions are made to an annuity
phase
2. accumulation an accounting measure, similar to a mutual fund share, used to determine an
unit annuitant's proportionate interest in the insurer's separate account during the
accumulation phase of a variable annuity. Both the number an value of these units
will change during the accumulation phase
3. administration under an insurance or annuity contract, the charge the insurance company makes
charge to compensate for maintaining records, accounting and reports generation
4. annuitant a person who receives the distribution from an annuity contract
5. annuity a contract in which the insurer agrees, for a price, to make regular payments to
an individual for life or some fixed period
6. annuity phase the period, after annuitization, during which annuity payments are made to an
annuitant
7. annuity unit An accounting measure used to determine the amount of each payment during
an annuity's distribution stage. The calculation takes into account the value of each
accumulation unit and such other factors as assumed interest rate and mortality
risk.
8. assumed interest an assumption, built into variable annuity contracts, of the minimum rate of return
rate AIR the insurer expects to receive and that forms the basis for an initial annuity
payment as well as a "floor" from which to measure gain
9. combined ("bal- an annuity providing for payments that derive from both fixed and variable annuity
anced") annuity accounts
10. death benefit an amount equal to the higher of the separate account balance or the sum of the
guarantee (VA) purchase payments, which is paid to the beneficiary of a variable annuitant in the
event of their death during the accumulation phase
, Michigan Variable Exam Questions & Answers 100% Verified (Grade A+)
11. deferred annutiy an annuity in which payments begin more than one payment period (one month
to one year) after the purchase date
12. direct method an approach to managing a variable products separate account that utilizes an
open ended investment company (similar to a mutual fund family) created inside
the structure of an insurer
13. diversification an investing technique characterized by buying a variety of ditterent investments
the market risk is spread out and reduced
14. dual licensure the requirement that a person who sells variable life or variable annuities must
be state licensed to sell life insurance, and also federally licensed as a registered
representative of an NASD member to sell variable products
15. expense guaran- a guarantee made by an insurer that expenses for a variable product will not
tee exceed certain maximum levels
16. fixed amount op- an insurance or annuity settlement option in which a chosen amount is paid out
tion for an approximate length of time when principal and interest are exhausted
17. fixed annuity an annuity providing that the insurer will pay the annuitant a guaranteed, fixed
amount during the annuity phase
18. fixed period op- an insurance or annuity settlement option in which an approximate amount is
tion paid out fo ra chosen length of time when principal and interest are exhausted
19. flexible premium a deferred annuity purchased with a series of payments, which may be irregular
deferred annuity as to amount or timing
FPDA
20. flexible premium a type of life insurance, also known as variable universal life, which is characterized
variable life by flexible premiums, adjustable death benefit, and the ability of the owner to
make partial surrenders
, Michigan Variable Exam Questions & Answers 100% Verified (Grade A+)
21. general account the account that holds all o fthe assets of an insurer other than those in the
separate accounts. the general account holds the premiums for all fixed life and
annuity products and is typically conservatively invested in bonds and commercial
real estate to produce a relatively stable return
22. growth an investment objective that focuses on long-term capital appreciation rather than
immediate income
23. immediate annu- an annuity, purhcased with a single premium payment, in which annuity payments
ity begin the next period (one month to one year) after purchase
24. income an investemnt objective that focuses on dividends and interest to produce income
rather than capital appreciation
25. indirect method an approach to managing a variable products separate account that uses a unit
investment trust contract with an investment company external to the insurer
26. interest only op- an insurance or annuity settlement option in which the insurer holds the principal
tion and pays interest to the beneficiary with a guaranteed minimum rate
27. investment com- a federal statute requiring insurer separate accounts to be registered as invest-
pany act of 1940 ment companies with teh securities industry
28. investment man- with a variable life insurance or variable annuity contract, this is the amount paid to
agement fee an investment advisor for providing professional investment advice for an insurer
separate account
29. joint life income an insurance or annuity settlement option in which payments continue for a s long
as both of two annuitants are living
30. joint and survivor an insurance or annuity settlement option in which payments continue fora s long
life income as either fo the two annuitants are living
31. life income
