Income Intermediate: Fixed Annuities

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1.
The period during which annuity premiums are paid is called the _______.
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Accumulation period. In the accumulation period, the annuity owner (annuity holder) pays premiums to the company.
2.
The period during which you receive payments from an annuity contract is called the _______.
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Payout period. In the payout period you surrender the value of the annuity contract in exchange for guaranteed monthly payments of benefits.
3.
Your monthly income from a fixed annuity is based on _______.
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Your age and your sex. Your age and sex are two factors that determine the monthly payment you receive from an annuity. "The value of your investments" indicates a variable annuity.
4.
A fixed annuity is a good hedge against inflation.
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False. Fixed-income payments and relatively low returns mean that annuities provide little protection against inflation.
5.
The earnings on fixed annuities are free from taxes until you annuitize.
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True. Annuity income is tax-deferred.