Eric purchased an annuity with favorable rates. However, due to
unforeseen circumstances, he needs to surrender the annuity. If the
market has gone up, Eric will need to pay a higher surrender charge
than if the market has gone down. Eric owns a(n)
Detailed Answer
B is correct. This is an example of a market-value adjusted annuity.
2
Mikaela has an annuity for which she is the annuitant. Which of the
following are definitely true based on this information?
Detailed Answer
B is correct. Her benefit payments will be based on her life
expectancy.
3
Tracey is paying money into an annuity she hopes will support her
retirement years. What period is her contract currently in?
Detailed Answer
A is correct. The period of time during which a person pays into an
annuity is known as the accumulation period.
4
Liz purchases an immediate annuity. What must be true about the
annuity contract?
Detailed Answer
D is correct. Immediate annuities are purchased with a single premium payment.
5
Which of the following types of annuities are regulated as securities?
Detailed Answer
C is correct. Variable annuities have investment elements that are subject to securities regulation.
6
According to the NAIC Model Group Life Insurance bill, a true group
has at least
Detailed Answer
C is correct. A minimum of 10 people is usually the requirement.
7
A contributory life insurance plan must cover
Detailed Answer
B is correct. According to regulations, when employees contribute any
part of the premium, at least 75% of the eligible employees must be
covered.
8
Doris dies 15 days after her group coverage is terminated and before
she has the chance to convert her policy to permanent coverage.
Doris’s beneficiary will receive
Detailed Answer
A is correct. When a person dies during the conversion period, the
full benefit is paid under the group policy.
9
Which of the following would not qualify as a dependent for group
insurance coverage?
Detailed Answer
B is correct. The parents would probably not qualify as dependents.
10
Which of the following is true about conversion from group life
insurance?
Detailed Answer
D is correct. Premiums for a converted policy are based on an
insured’s attained age at the time of conversion.
