Which of the following statements is (are) true with regard to the adequacy of IRA funds during retirement? I. To assure lifetime income, the IRA funds can be used to purchase a life annuity. II. The duration of IRA benefit payments depends on the rate of return earned on the invested assets after retirement and […]
Purposes of the coinsurance provision in medical expense insurance policies include which of the following? I. to reduce premiums II. to prevent overutilization of policy benefits A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Some insurers offer a single-premium deferred annuity that does not begin paying benefits until an advanced age, such as 85. This product is called A) endowment insurance. B) equity-indexed annuity. C) life income with guaranteed payments annuity. D) longevity insurance. ANSWER Answer: D
Under the Affordable Care Act, if a health insurer does not meet the minimum loss ratio requirement, the insurer must A) pay a fine to the federal government. B) issue rebates to the people the insurer covered. C) not sell any health insurance for a period of one year. D) reduce the premium on the […]
Which of the following is an advantage of a longevity annuity (longevity insurance)? A) Death benefits are paid to a beneficiary if death occurs during the deferral period. B) The interest rate credited to the cash value is higher than what is earned on traditional life insurance. C) Monthly benefits begin at an advanced age […]
Traditionally, tables have been prepared showing how long IRA funds will last based on rates of return and annual withdrawal rates. These tables, however, assume constant returns over the projection period. Many financial planners are now using a technique that allows for fluctuations in market returns. A computer is programmed to estimate how long funds […]
Which of the following statements is (are) true about a longevity annuity (longevity insurance)? I. If the annuitant dies during the deferral period, the purchase price of the annuity is forfeited. II. Longevity insurance is an example of an immediate annuity. A) I only B) II only C) both I and II D) neither I […]
Agnes and Mary Clare, two elderly sisters, own an annuity covering both of their lives. The annuity pays benefits to them until the first sister dies, then the annuity terminates. Agnes and Mary Clare own a(n) A) flexible premium annuity. B) joint life annuity. C) longevity annuity. D) joint-and-survivor annuity. ANSWER Answer: B
James is concerned that if he purchases a fixed immediate annuity his funds will be tied-up and not accessible if an emergency arises. His insurance agent said that a rider could be attached to his annuity to address this concern. The rider is a(n) A) partial cash withdrawal rider. B) return of premium rider. C) […]
Which statement is true regarding IRA distributions? A) The minimum distribution rules apply to Roth IRAs, but not to traditional IRAs. B) Distributions from a Roth IRA are taxed at the individual’s marginal tax rate. C) The IRA penalty tax applies to all traditional IRA distributions before age 59.5 with no exceptions. D) Unless a […]