SERIES 65 Chapter 2 Insurance products: Annuities and
Life Insurance || with Accurate Answers 100%
variable payments
variable rate of return
investment risk assumed by annuitant
portfolio of equities, debt, money market funds
separate account
resistant to inflation
insurance and securities regulation correct answers variable annuities
agent must have:
securities license registered by FINRA in state
insurance license in state correct answers separate account management requires
guaranteed fixed payment
guaranteed interest rate
investment risk assumed by insurance company
portfolio of fixed-income securities
general account
vulnerable to inflation
insurance regulation correct answers fixed annuity
investment company
shares
investment objectives: varied
no guarantees
redeemed by issuer
price based on formula correct answers Mutual fund characteristics v. variable annuity
insurance company
units
investment objective: growth & income
few guarantees
redeemed by issuer
price based on formula correct answers variable annuity V. mutual fund characteristics
fixed plus variable account
guaranteed payment + pace with inflation correct answers combination annuity
participation rate in stock index
, 80-90% participation
minimum guarantee return3-4%
cap rate e.g. 12%
longer surrender period correct answers equity index annuity
annual reset: difference in index value 1/1-12/30
high water mark: highest value reached between anniversary dates of annuity re: value beginning
of the year
point-to-point: or annual point to point: value at end of contract correct answers interest growth
calculation
single lump sum investment, benefits deferred til annuitant elects correct answers deferred
annuity
monthly quarterly or annual basis
annuitant elects benefit pay out correct answers periodic payment deferred annuity
single lump sum, begin payment in 60 days correct answers immediate annuity
pay in period
may borrow from account correct answers accumulation stage
investor ownership share in separate account correct answers accumulation units
no maximum sales charge correct answers on variable annuities
distribution or payout period correct answers annuity stage
annuitizing the contract correct answers withdraw funds
may not be changed
locks in specific payout options
largest to smallest
periodic payments over lifetime correct answers life annuity/straight life/pure life
life annuity period certain correct answers minimum period guaranteed
upon death, if period not used up,payments continue to named beneficiary
if annuitant lives, payments continue until death
annuity covering 2 + people
payment conditional on both lives
payment cease at last survivor's death correct answers joint life with last survivor annuity
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