NAIC390 Exam Questions With Correct
Answers.
Regarding indexed annuities, the participation rate is best described as: - answerThe
percentage of increase in the index that will be used to calculate the index-linked interest rate.
Mortality and expense risk charges are designed to offset the ins...
Regarding indexed annuities, the participation rate is best described as: - answer✔The
percentage of increase in the index that will be used to calculate the index-linked interest rate.
Mortality and expense risk charges are designed to offset the insurer's risk that the annuitant will
outlive his or her - answer✔Life expectancy.
By creating a shared-risk pool, a fixed annuity evens out the ______ of the participants. -
answer✔Mortality risk.
Kate chooses a payment option that will guarantee payments for her lifetime but with an
additional guarantee that payments will be made for at least 10 years should she die before then.
This is referred to as a(n) ___________ payout. - answer✔Life with period-certain.
Variable annuities offer investment options through a variety of ___________ that have a range
of investment objectives to match consumer's risk tolerances, time horizons, and goals. -
answer✔Variable subaccounts.
With this type of variable annuity living-benefit guarantee, the insurer promises a fixed lifetime
payment calculated a hypothetical benefit base even if the contract performs poorly. -
answer✔Guaranteed minimum income benefit.
If an annuitant surrenders his or her contract before reaching age 59 1/2, a ____________
premature-distribution tax penalty will apply. - answer✔10%
Tax advantages of annuities include __________. - answer✔Tax-deferred accumulations.
Starting in the 1970s, issuers began offering _________ insurance products that offered the
potential for greater returns through the inclusion of an investment component. -
answer✔Universal life.
In reference to indexed annuities, the terms annual reset, high-water mark, low-water mark, and
point-to-point refer to ____________. - answer✔Index methods.
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