Download Annuities: Understanding and Choosing the Right Type and more Exams Nursing in PDF only on Docsity! Annuity – WebCE Exam-with 100% verified solutions 2024-2025 Tutor verified Annuitization is Accumulated values are converted into a stream of periodic income payments. How often can payments of annuities be paid out? A specified term of years, for life, or a combination of the two. What is the reason (how has a consumer's priorities and needs shifted) that annuities are well suited for late-life retirement planning? When a consumer priorities and needs typically shift from asset accumulation to income distribution What is the start date range for deferred income annuities? Anywhere from 13 months to 40 years in the future. What is the age that Deferred Income Annuities' income start date cannot extend past? 85 years old. What are Surrender Charges? Fees the insurer assess for early withdrawals or contract surrenders. What is a Withdrawal Fee? when less than the full contract value is taken. What are the two approaches for insurers to determine the surrender charge? What are other ways? 1) Account Value Method 2) Premium Deposit Method 3) Market Value Adjustments 4) Premium Tax What is the Premium Deposit Method of determining the surrender charge? The charge on the amount of the contract's invested premium, applying a percentage that usually declines annually over the surrender charge period. What is the Account Value Method of determining the surrender charge? Assess a surrender charge equal to some percentage of the contract's accumulated value. What is Premium Tax in relation to the annuity? A number of states impose a tax on annuity premiums. What does the Mortality and Expense (M&E) charge? Assessed against the values of the separate subaccounts and is deducted before accumulation unit values are calculated. It helps ensure that the insurer can meet its contractual obligations for annualized income payments and a minimum death benefit. The cost of a variable annuity's death benefit and annuity charge plus related insurer costs (such as agent commissions and overhead) Which expense of a Variable Annuity, which is the most criticized? And why? The Mortality and Expense. What are the two fundamental factors that separate one type of annuity from another? 1) When the Contract is Scheduled. (Immediate and Deferred Annuities) 2) How the Contract's funds are invested. (Fixed, Indexed, and Variable Annuities) What are Immediate Annuities often referred to as? SPIAs - Single Premium Immediate Annuities What type of income streams can SPIAs generate? - Fixed and unchanging -Variably (which can increase or decrease according to the performance of underlying investment accounts) Fixed or Variable, the duration of the immediate annuity income stream is guaranteed by the insurer. What type of Annuity is designed to accumulate funds for the long-term? Deferred Annuities The period during which funds are deposited into the contract and are credited with a certain rate of interest earnings or grow in relation to the performance of the investments in which they are deposited is known as what stage? Accumulation Stage. What are the options for the owner of the annuity at the end of the accumulation stage? 1) withdraw the funds in whole or in part. 2) leave the funds in the contract to continue accumulating 3) annuitize the contract T/F: Can a deferred annuity be funded with a single lump sum premium deposit OR with a series of premium deposits over time? True. What is the right way to always begin an annuity for a buyer's needs? If the buyer wants to use an annuity to save and accumulate funds, the choice is the deferred annuity. If the individual is ready to turn his or her savings into income now, the choice is the immediate annuity. If the individual wants to lock in a future income stream today for a payout years into the future, the choice would be a deferred income annuity.
