Types of Policies
A deferred annuity stops building value for future income and begins making scheduled income payments. Which phase has begun?
Answer and explanation
Answer: C. The payout phase begins when the annuity starts making income payments. During the accumulation phase, value changes before payouts begin; the other choices are not the two fundamental annuity phases described in the guide.Source: NAIC — Buyer’s Guide for Deferred Annuities — Guide page 1, How Deferred Annuities Are Alike — accumulation period and payout period
More types of policies questions
- In variable life insurance, what most directly causes the policy’s cash value to fluctuate?
- Most modern fixed annuity contracts allow what penalty-free withdrawal percentage annually during the surrender charge period?
- To what external benchmark is the interest crediting rate of an equity-indexed life insurance policy tied?
- Two business owners need one life policy to provide funds when the first of them dies. Which policy trigger is required?
- Two business partners purchase a joint life policy to fund a buy-sell agreement. Partner A dies. What happens to the policy after the death benefit is paid?
- Under a fixed indexed annuity’s basic index-crediting structure, what interest is added for an index term with a negative result?
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