Income Intermediate: Deferred 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.
A non-qualified annuity can be a good way to avoid all of the following except _______.
Choose wisely. There is only one correct answer.
Early withdrawal penalties. Unlike the other choices, early withdrawal penalties can't be avoided with deferred annuities (except, of course, by not withdrawing your funds prematurely!).
2.
All of the following are benefits of deferred annuities except _______.
Choose wisely. There is only one correct answer.
Easy access to capital. Easy access to capital is not a benefit of deferred annuities, where surrender fees and tax penalties can affect early withdrawals.
3.
You must pay taxes on investment earnings that build in your annuity account.
Choose wisely. There is only one correct answer.
False. Your earnings in a deferred annuity build on a tax-deferred basis. You pay no tax on them until you receive them as a payout.
4.
An annuity that makes payments at a guaranteed level is a(n) _______.
Choose wisely. There is only one correct answer.
Fixed annuity. A fixed annuity is an annuity that makes payments at a guaranteed level.
5.
An annuity that makes payments during the lives of more than one individual is called a _______.
Choose wisely. There is only one correct answer.
Joint and survivor annuity. Joint and survivor annuities make payments during the life of the annuitant and a beneficiary, such as a spouse.