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32 Cards in this Set

  • Front
  • Back
The _____ _____ _____ is the amount that must be earned in a variable annuity to keep the level of payments the same.
assumed interest rate
What is the "separate account" separate from?
The general account where all of the other policy holders money is deposited.
What is the Treasury Life Expectancy Multiple?
It is a annuity payout exclusion based on the age and sex of the annuitant.
One feature both fixed and variable annuities share is that all taxes on earnings during the accumulation period are ____ until the payout period begins.
During the payout period, the number of annuity units is a ______ amount.
constant. What varies on a variable annuity is the value of the annuity unit.
An annuity contract enables an investor to give ___ to an _____ ____ to do what?
money; insurance company;

Put the money into one of its investment portfolios.
Variable annuities cannot be sold without a _______.
If an investor wanted to do a partial withdrawal from a non-qualified annuity, the IRS would treat the funds withdrawn on a ____ basis.
Non-Forfeiture Provisions are stated in the Prospectus which say that, during the accumulation phase, whatever an investor has invested in the annuity ______.
is his to do with whatever they wish.
What is a fixed annuity?
When an insurance company agrees to pay a Fixed Monthly amount beginning on an agreed on date.
The Expense Guarantee is stated in the Prospectus as a guarantee that _________.
the operating expenses of the variable annuity will never exceed a certain amount, typically 1%.
What are the three methods of purchasing an annuity?
1. Single Payment Immediate

2. Single Payment Deferred

3. Periodic Payment Deferred Annuity.
Once the annuity has been annuitized, the investor loses ____ ____ ___ the account.
all control over
Unlike government retirement programs, there is no set ___ in an annuity that one must begin receiving payments, instead _____.

it is mutually determined between the investor and the insurance company.
The mortality Guarantee is stated in the Prospectus and guarantees ______.
the annuitant will get a monthly check for as long as he lives.
How is the "Identified Shares Method" employed on partial withdrawals from a Mutual Fund? What is the alternative?
The IRS allows the investor to state which shares were sold early. The alternative is the IRS will use the LIFO method.
The Death Benefit is stated in the Prospectus and says that the investor, in the accumulation phase, is guaranteed to _______.
get back no less than the amount of his investment should he die before annuitizing.
During the annuity period the holder of a variable annuity assumes ____ ____, and this is why the SEC has determined they are _______.
investment risk; securities
With an early withdrawal from an annuity, the investor is subject to what two taxes?
1. His income tax rate on the qualified portion of the withdrawal.
2. A 10% tax on the qualified portion as a penalty for early withdrawal.
The maximum sales charge for a variable annuity is ____ but only for the first ___ years.
8 1/2%;

If the investor dies during the accumulation period of a variable annuity, the death benefit provision calls for ____.
Payment of the total of the investments plus all the earnings to-date to the beneficiary.
The specific name given to the separate insurance company portfolio for the variable annuity contract holders is the ____ ___.
separate account
Instead of shares, an insurance company keeps track of your annuity in the Separate accounts as ____ ____.
accumulation units
The period of time that an investor puts money into an Annuity is called the _____ ___.
accumulation period.
The earnings portion of the proceeds of a death benefit provision paid to a beneficiary are taxed as _____.
ordinary income
The period of payout is called the ___ ___.
annuity period.
Forward Pricing means ___.
The price assigned when accumulation units are next calculated.
Since both fixed and variable annuities are _____ products, the appropriate State ____ licence is required to sell them.
Insurance; Insurance
On the date the Annuity switches from accumulation phase to payout phase, it is _______, which means the investor chooses his payout option.
Who assumes the risk in a fixed annuity?
The insurance Company
The value of an accumulation unit is determined at what time?
4PM Eastern Time.
On the day an annuity is annuitized, the insurance company converts the accumulation units into a fixed number of ______ ____.
annuity units