Income Intermediate: Fixed Annuities

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
What is taxed during the accumulation period of a non-qualified annuity?
Choose wisely. There is only one correct answer.
Annuity contributions. The income you contribute to a non-qualified annuity is subject to taxation during the accumulation period. A non-qualified annuity is one that is outside of a retirement plan.
2.
The period during which you receive payments from an annuity contract is called the _______.
Choose wisely. There is only one correct answer.
Payout period. In the payout period you surrender the value of the annuity contract in exchange for guaranteed monthly payments of benefits.
3.
When you annuitize, you are paying into your annuity account.
Choose wisely. There is only one correct answer.
False. When you annuitize, you begin receiving income from your annuity.
4.
The period during which annuity premiums are paid is called the _______.
Choose wisely. There is only one correct answer.
Accumulation period. In the accumulation period, the annuity owner (annuity holder) pays premiums to the company.
5.
The better your investment choices pay off, the more your fixed annuity will pay.
Choose wisely. There is only one correct answer.
False. Fixed annuities earn a fixed income rate and pay a fixed income, regardless of the performance of the underlying investments. You do not make investment choices in a fixed annuitypremiums go into the general account of the company.